Customer Contracts
Overview
Traditional electricity contracts are remarkably simple.
Customers purchase electrical energy, measured in kilowatt-hours, and pay a fixed or time-varying price for each unit consumed.
Beyond this, very little information is exchanged between the customer and the electricity provider.
The provider does not know which devices are flexible.
The customer does not communicate which services are time-critical.
Every appliance is therefore treated in essentially the same way.
FP-AMM replaces this one-size-fits-all model with Service Contracts that explicitly describe the energy services customers wish to receive.
Purchasing an Energy Service
Under FP-AMM, customers do not simply purchase electricity.
Instead, they purchase an energy service.
Each service defines not only how much energy is required, but also how that energy may be delivered.
For every participating device, the contract specifies:
- the required energy,
- the available delivery window,
- the maximum charging or discharge rate,
- the selected Service Level,
- any device-specific operating constraints.
The market then coordinates these requests continuously while respecting both customer preferences and the physical limitations of the electricity network.
Registering Flexible Devices
Only devices capable of providing flexibility participate in the Service Level market.
Typical examples include:
- electric vehicles,
- household batteries,
- heat pumps,
- hot water storage,
- commercial refrigeration,
- industrial flexible processes.
When registering a device, the customer provides the information required to coordinate that service.
For example, an electric vehicle may specify:
- arrival time,
- departure time,
- required energy,
- maximum charging rate,
- preferred Service Level.
This information defines the flexibility available to the market.
Essential Demand Remains Unchanged
Participation is entirely voluntary.
Essential household consumption continues to operate exactly as it does today.
Examples include:
- lighting,
- cooking,
- refrigeration,
- medical equipment,
- general socket demand.
These services remain outside the Service Level market.
Customers therefore retain the level of reliability expected from today's electricity system for essential electricity use.
Only registered flexible devices participate in market coordination.
Choosing a Service Level
Each participating device is associated with a Service Level selected by the customer.
Higher Service Levels provide stronger reliability commitments.
Lower Service Levels provide greater scheduling flexibility in exchange for lower costs.
Customers therefore choose the balance between certainty and cost that best matches the requirements of each device.
Importantly, Service Levels apply to individual services rather than entire households.
For example,
an electric vehicle may participate using a highly flexible Service Level,
while the household itself continues to receive conventional electricity supply for all essential consumption.
Contracts Describe Flexibility
A Service Contract does not simply describe energy demand.
It also describes flexibility.
For example, two electric vehicles may each require 40 kWh of charging.
The first vehicle departs at 7:00 am.
The second departs at midday.
Although both require the same amount of energy, the second provides significantly greater scheduling flexibility.
FP-AMM incorporates this flexibility directly into market coordination.
The contract therefore becomes an accurate representation of the service the customer actually requires.
Continuously Updating Commitments
Service Contracts are not static.
As the market evolves, customers may submit new requests, modify existing requests or withdraw flexibility.
Similarly, forecasts improve continuously.
Renewable generation changes.
Network conditions evolve.
FP-AMM continuously updates the scheduling of contracted services while remaining consistent with the commitments agreed between customers and electricity providers.
Planning therefore becomes a continuous process rather than a sequence of fixed market intervals.
Transparent Customer Choice
Making Service Contracts explicit provides several important advantages.
Customers know:
- what service they have purchased,
- what level of reliability they have selected,
- what flexibility they are offering,
- how those choices influence cost.
Electricity providers similarly understand:
- available flexibility,
- future demand,
- customer commitments,
- expected reliability requirements.
The relationship between customer and provider therefore becomes transparent rather than implicit.
Contracts Form the Basis of Market Coordination
Service Contracts define the commitments that FP-AMM attempts to satisfy.
Most of the time, every contracted service can be delivered successfully.
During periods of genuine scarcity, however, multiple contracts may compete for the same limited resources.
The market must therefore determine which services should receive priority while ensuring that fairness is maintained over time.
This allocation is governed by the Fair Play mechanism described in the following section.