Source: http://www.technologyreview.com/news/527...

At $249 a pop, that’s a nice business. But more interesting is what Nest has been up to since last May in Texas, where an Austin utility is paying Nest to remotely turn down people’s air conditioners in order to conserve power on hot summer days—just when electricity is most expensive.

For utilities, this kind of “demand response” has long been seen as a killer app for a smart electrical grid, because if electricity use can be lowered just enough at peak times, utilities can avoid firing up costly (and dirty) backup plants.

Demand response is a neat trick. The Nest thermostat manages it by combining two things that are typically separate—price information and control over demand. It’s consumers who control the air conditioners, electric heaters, and furnaces that dominate a home’s energy diet. But the actual cost of energy can vary widely, in ways that consumers only dimly appreciate and can’t influence.