Ernest from Spokane Valley. Getting asked more frequently about cannabis cultivation facilities as they become legal in more states. These operations have enormous lighting and HVAC loads. The rate class situation is unusual — some utilities have created specific agricultural or horticultural rates that apply, others put them on general industrial, and some have explicitly excluded cannabis from preferred rate categories. Anyone working in this space?
Rate class for a cannabis operation — navigating a new industry
Larry from Spokane. I have done two cannabis cultivation engagements. Both were on general commercial rates when they clearly qualified for agricultural-horticultural rates based on the nature of the operation and the connected load.
Larry how did the utilities respond when you filed?
First one accepted the reclassification without question — the tariff language was broad enough. Second one pushed back, claiming cannabis was not an agricultural product under their tariff's definition. I had to cite the state agricultural department's classification of cannabis as a crop. They accepted it after that.
Dale from Spokane Valley. The federal banking and regulatory status of cannabis can complicate things too. Some utilities are cautious about creating special arrangements with cannabis businesses for compliance reasons. Worth understanding the local regulatory environment before you pitch.
Dale that is an important point I had not fully considered. Going to look at the state utility commission's guidance on cannabis accounts before my next engagement in this sector.
Larry one more time. Also check whether the facility has growing and processing on the same account. Processing may have a different rate class eligibility than cultivation.