In the US and Canada, there are nine regional energy markets where energy is traded. These markets provide a trading mechanism for buying and selling energy over many timeframes. Multi-year planning is done to make sure that the region has the right development of infrastructure. Minute by minute planning is done to make sure that supply and demand are balanced and there are no blackouts.
OhmConnect trades energy in these markets like a power plant. We bid a quantity of energy at a specific price and if the market accepts our bid, we are contracted to deliver that energy. Most markets use an auction mechanism to settle bids and our bids are accepted based on how they rank relative to other bids. Auctions might occur years, days, or minutes in advance. We work hard to simplify this complexity to deliver #OhmHours to our members consistently. Behind the scenes we use automated bidding, data analysis, machine learning and experimentation to try to match up #OhmHours with our commitments to the market.
OhmConnect sets the price for the #OhmHour based on the various prices we get from the market. Our energy delivery is measured based on the forecasted use of our members versus their actual usage. We aim for an 80/20 split of revenue annually but it doesn't happen on a per #OhmHour basis. We get paid at various intervals (daily, monthly, annually) with complex rules but we are aiming to create a fun and easy experience that is simple and rewarding. We don't want people to have to learn about locational marginal pricing, proxy demand resources, load point adjustments or any of the other myriad complexities necessary to participate in the energy market. We will continue to experiment with different reward structures (different prices, prizes, streaks, etc...) to maximize effectiveness.
As a company, one of our values is "champion of the customer"; we try to do right by our members even if the energy market doesn't support our view. Some examples: we don't get paid for solar users that are net generators yet we still pay them, a user that opts out is still counted when we settle with the market so we end up eating the shortfall because we believe flexibility is important, we always pay more than the retail price even when we are getting paid less.
We also have a great OhmConnect Blog post about this subject here.