Affordable Power for a Growing Industry
Affordable Power for a Growing Industry
Stepbrothers J.T. Tidwell and Brandon Rennick had successful careers in business technology and as a doctor, respectively. But four years ago, they decided to become entrepreneurs in California's burgeoning legal cannabis industry. With the help of investments from family and friends, as well as valuable guidance from Southern California Edison, Desert Flower Farms is just weeks away from opening its marijuana grow operation in an understandably nondescript building they purchased in the Coachella Valley.
"The first thing you look at in a prospective property is 'is there enough power?'" Tidwell said. "Our business needs a lot of lighting."
That's where the partnership with SCE began. Desert Flower Farms planned to grow marijuana on two floors of a 12,300-square-foot space, which would require about 600 lights. The first step was to dramatically boost the power flow to the building from 200 to 1,600 amps. SCE installed a larger capacity transformer on the property, then turned its attention to helping the entrepreneurs mitigate what stood to be a massive electric bill.
"This is a project they were building from scratch, taking an empty warehouse and developing their grow operation," said Thomas Lor, an engineer with SCE's Business Customer Division. "Controlled Environment Agriculture includes the use of specialized lighting technology to create ideal conditions for various crops that can be grown indoors. This market segment is expanding rapidly, often with heavy demands on the power grid. Our goal has been to help these customers use energy as efficiently as possible while still optimizing their operations."
Cannabis growers typically operate traditional high-intensity discharge lighting, which is inexpensive to purchase, but costly and inefficient to operate. Lor suggested Desert Flower Farms consider energy-efficient LED lighting, which would provide long-term cost savings and qualify for financial incentives.
"We are going to spend about three times as much upfront on lights, between $750,000 and $1 million. But because of the rebate from Southern California Edison and the savings from energy efficiency, I think we'll recoup the upfront costs in a year and a half," Tidwell said.
"LED lights are cooler, so we can position them closer to the plants. That will save us space and allow us to grow four tiers of plants instead of just two," Rennick said.
Obtaining traditional financing can be difficult for cannabis operations because they remain illegal in many states outside California.
"They're often an all-cash business, so their focus is using the cash they have to start their operation and start growing as cheaply as possible," said James Pasmore, SCE business account manager. "When we tell growers that using energy-efficient lighting will pay off in two to five years, usually they don't care to hear that. But when we can offer financial incentives to help offset the cost, it becomes more attractive to them."
An added benefit, Tidwell said, is that using less energy will align with the company's efforts to promote sustainable business practices, which he says surprisingly have not become a hallmark of the cannabis industry. Desert Flower Farms has committed to using 100% renewable energy.
The legal cannabis the company will grow will be used not only for smoking but for various products. The facility will have a manufacturing capacity of 7.5 million gummies, 500,000 vapes and 500,000 tincture bottles per year. The company says it is on the verge of an agreement to take over manufacturing for a major Southern California cannabis brand.
"One of the historical challenges we've had working with these businesses to reduce their power consumption is that because these operations were on the black market for so long and were only recently legalized, the utility has not often been viewed as their friend," Pasmore said. "Being able to help them with technical assistance and equipment efficiency incentives has gone a long way toward overcoming that hurdle."
Customers in the Controlled Environment Agriculture industry can contact SCE Local Planning for power service inquiries. For account management inquiries, contact the SCE Ag & Water Desk.