5 utility-bill errors that prove costly for indoor cannabis growers

(This is a contributed guest column.To be considered as an MJBizDaily guest columnist, please submit your request here.) Bob Gunn (Courtesy photo)Electricity costs are the second-largest operational expense for indoor cultivation facilities – right after labor.

If you’re like most indoor growers, you might cringe at the sight of your utility bill, pass it off to accounting and hope for the best.However, with the right insight, utility bills contain the potential to unlock cash returns – plus ongoing savings for years to come.

ADVERTISEMENT Indoor agriculture is a bit of a mystery for electric utility companies; working in a newer industry with unique operational models, cannabis growers are especially susceptible to utility errors that lead to overpayment.The most common mistakes that lead growers to overpay include: 1.

Rate-classification errors Rate classes determine how much you are charged for electricity.Many cultivators are assigned the rate class of the previous tenant or placed in the wrong category by utility staff unfamiliar with the nuances of indoor agriculture.

With commercial and industrial rates, the more you use, the less expensive your energy is.Most of our clients use significantly more electricity than the previous tenants.

Utilities generally don’t have automatic triggers to identify when rate changes are necessary, and customers can get stuck in the wrong rate class for years.“Small commercial” is a rate many utilities use for warehouses.

However, when cultivators depend on electricity for producing a product or food, they are eligible for a lower “manufacturing” or “agricultural” rate (names vary between utilities).Fix: Double check with your utility that you’re on the correct rate class.

We’ve worked with cultivators who have switched rates and saved tens of thousands of dollars each year; others have received refunds of $200,000-$300,000. ADVER...