Nest today is announcing partnerships with a few utilities that could make demand response, or dialing down power use during peak times, familiar and palatable to more consumers. It also has utility deals for thermostat rebates and a service to automatically tune a house’s thermsostat settings during seasonal changes. These applications, called Nest Energy Services, show how the company can deliver add-on services that combine the thermostat—effectively a small computer on the home network—and its cloud-based analytics.

For Nest, founded by former Apple engineers, these utility partnerships are a way to reach more customers and deliver more advanced software services through its acclaimed, Internet-connected thermostat. For utilities, it could increase participation in demand response, a little-known but increasingly important tool for managing grid stability. (See, Turning off the Power to Run the Grid.) Consumers, meanwhile, can save some money on energy bills. 

Very hot days can strain power generators’ ability to keep pace with the large air conditioning load, particularly in the late afternoon and early evening. To meet that peak power demand, utilities call on auxiliary power plants, which are often dirtier and deliver more expensive power. Demand response lightens the peak load by remotely raising air conditioner thermostat settings in consumers’ homes. (Commercial demand response covers industrial equipment and lighting, too.) Consumers are compensated through a rebate or other payment for these peak demand events, which may only come 10 or 15 times a year.

Nest hopes to improve on the demand response experience, using its thermostat as a gateway to consumers. It developed a feature, called Rush Hour Reward, that works like other demand-response programs by adjusting settings. But Nest has negotiated good terms on behalf of consumers, says Maxime Veron, director of product marketing at Nest Labs. People will be notified the day in advance when the thermostat will be adjusted, it will never go above 3 degrees above its normal setting, and the demand response events won’t happen on weekends or three days in a row. That service, already offered with Reliant in Texas, will be extended to Southern California Edison and Austin Energy in Texas. (See, Smart Thermostat Maker Nest Labs Cozies up with Utility.)