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00:00Interesting to get paid to not use something but that's certainly what we actually need on the electric grid in the United States right now. We operate in California New York and Texas. We also operate throughout Australia. So we currently have about 300000 customers that are enrolled participating and getting paid for their energy reductions. And really the way it works for a customer is pretty simple. You take a couple of minutes to sign up you connect. So we have some energy data coming off of your smart meter. And at that point we can then know what you normally use in energy and the markets can understand what you normally use for your energy. And when we ask you to conserve and you reduce a little or we control devices in your home and you reduce a little then we can pay you for the difference between what you normally use and the lower amount you're using at that time. And that all works because back in the back of that it means that grid operators and utilities can avoid turning on a new power plant. They can actually we can reduce that demand rather than turning on a plant. Cisco how does the grid know that people are actually going to turn the devices off. I appreciate that if you can turn them off. That's one thing. But how do you how do you guarantee that people are going to deliver on what they say they're going to deliver. Well look an individual varies. I may or may not act in a particular event but the law of large numbers works here. And this is where A.I. and machine learning comes in. We've done 50 million tests where we understand exactly how groups of customers tens of thousands hundreds of thousands are going to act when we give them an input. When we say hey here's the reward you can earn here's the time that this is the time of day. Here's the weather. We can predict with incredible accuracy how many megawatts of demand we'll take off the grid at any given time. And so it really takes all of those years of testing and experimentation coupled with all that data for us to be able to be as predictable and reliable in our reductions as in our as a power plant is in its production. So what is the difference. And I appreciate that there is one but what is the difference between say me getting solar panels on my house and then when I'm not using the energy I send it back to the grid then I get a discount on my energy bill. What's the material difference here and why can't utilities or power plants do what you're doing. Well essentially if you think about what a power plant does is is what we do which is it turns on to meet increased demand on the grid. And what we do is just turn off demand in order to avoid having that power plant turn on. Now if you really sort of think about you go back when you're asking a really good question which is why. First of all you know how do we get people to do it and why can't others do this. And the answer is we get people to do it because we have figured out how to incentivize people to make reductions manually and to give them dollars and rewards for the automated reductions that they allow us to do on their behalf. So they get comfortable with it over time. This often can take months or years. We've done that now so many times on so many different variations of it that it has allowed us to get to a level of scale that is not just in a utility or one neighborhood but is actually statewide and now nationwide. Cisco Europe may desperately need this kind of procedure this winter. Would what you're doing work here are you considering it working here. Could it work here. Oh absolutely. I mean I think one of the key things about electricity is it needs to be consumed the moment it's created. So there's no storage for it. And of course it is still tied to the price of natural gas which has been skyrocketing. So we've been contacted by a number of utilities and entities in Europe who are looking for ways to cut peak demand and keep those power plants off during these tough winter months. We were also recently contacted by the White House and the State Department of State who are looking to bring us technology into Europe for this winter to see if there's ways we can help folks reduce some of the demand. It's going to be the hardest to meet. What kind of regulatory help would you need to make this happen. Like why isn't this say all over the US. Well federal regulations through the FAQ have said for about 10 years that all U.S. wholesale electricity markets have to allow for things like home connect. They have to pay for a megawatt of reduction with the same amount of money and in the same way that they pay for a megawatt of production from a power plant. So that works in about two thirds of United States where these wholesale markets are already exist. The challenge is what are we. How do we bring this nationwide to the rest of the country. And then how do we take that model and take it out to other countries where they don't have these electricity markets. If I have a smart meter at home generally do I own the data or does my utility owned the data. That is one of the big battles of our time. The data on your smart meters should belong to the customer. It is your data it is your use and you should be able to use it to make money or make choices about your energy. Unfortunately a lot of times utilities still think of it as their data and information. They want to protect sometimes even from the customer. So this has been a big effort dating back to the Obama administration that continues which is how do we make sure that customers can make use of the data on these expensive new smart meters we've rolled out around the country and that are being rolled out around the world. I think ultimately this is the trillion dollar unlock. That data is worth a trillion dollars. It is how we can control and manage the energy grid during this transition to clean energy and to manage through these shocks and changes that happen with extreme weather and events like the conflict in Ukraine. So if that part is definitely key to unlocking not only savings for consumers but also in terms of helping the grid what if what is the biggest hurdle to doing that right now. You know the biggest issue that we have right now in the markets we we operate in is that honestly people think this is a scare right. I'm a free service that gives you free things and pays you. And so for many people they look at that and think well geez there must be some trick. They don't understand where that money could come from. So we have a big issue just getting people to understand the value of their electricity and how it varies over time and how you can get paid for it. Once we get over that hurdle the biggest issues are just how do we get all of these markets to be able to accept megawatts of energy reduction. And I'll just give you an example. We recently entered the state of New York and we now have thousands of customers throughout New York particularly in the city of New York where there's significant congestion to other issues on the grid. We began to integrate into the state grid operator. Nice. So the independent system operator that manages the grid for the state. And it turns out was we started to do it there. Wait a minute. We have a problem. We can't accept any back meter that doesn't have more than one kilowatt of use on it. So most homes that don't use any more than a kilowatt of times couldn't participate. So those are the kinds of things we find across the country and across each state.

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Getting Paid to Cut Your Energy Use

OhmConnect is a California startup that pays people to cut their energy use when the grid is strained. CEO Cisco DeVries joined "Bloomberg Markets: The European Close" to talk about how it works and whether the platform could be used to help mitigate Europe's energy crisis. (Source: Bloomberg)

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