Oakland startup OhmConnect will pay you to save electricity

Oakland startup OhmConnect raised a $55 million Series D this week to bring its unique solution to saving energy consumption in households to the masses.

The round was led by ClearSky, Sidewalk Infrastructure Partners (SIP) and TELUS Ventures, and included investment by Carrier and SunPower.

OhmConnect offers an app that allows users to earn money and other rewards by reducing their power usage at peak times. The company alerts home owners with smart meters when they should reduce their energy usage so they can unplug appliances like a second refrigerator or TVs. They are rewarded with points called "watts" that can be redeemed for cash, gift cards or energy-saving appliances.

Through a bizarre legal framework, OhmConnect is actually regulated as a power plant as it sells the grid a reduction in demand, instead of an increase in supply, which as far as the grid is concerned is the same thing. The company earns money by selling demand reductions to the grid and passes some of the earnings on to the users.

CEO Cisco DeVries expects demand for the product will grow this summer as California's energy grid gets hit with a "perfect storm" of problems.

“We suspect that our user base is going to grow a lot in July to August as people get their first big summer electric bills," he said. "Climate change has created more extreme heat, and we're living through this historic drought, so there's less hydroelectric power and there's more demand because of the heat. The second part is natural gas prices, which is the main fuel that's used to create power and prices have gone through the roof partly due to the war in Ukraine."

Users of OhmConnect average savings of 10% on their electricity bills along with the rewards they earn through the app. DeVries says top users can earn hundreds of dollars a year in cash and rewards if they are diligent about following the commands of the app.

One of the founders of the company, Cadir Lee, was previously the CTO at Zynga, the developer of Farmville and a host of other mobile games.

DeVries says OhmConnect strives to brings this kind of gamification to energy savings by making its users feel competitive about the amount they save and accomplished when they meet targets set by the app.

The company got its start in 2013 and one of its first funders was the California Energy Commission. It currently has 90 employees and an office near Jack London Square in Oakland.

DeVries says the funding will be used to expand headcount and for customer acquisition, but he also hopes some of the big names attached will help grow the service's legitimacy in the eyes of consumers.

"One of the biggest challenges we have as a company is that people don't believe it's true that we're a free service that gives you free things," he said. "So one of the great things about bringing in this investment from household name brands is that it helps people get comfortable that this is for real."