[antsar]

At a glance, this seems fairly useful/progressive. I'd imagine there are plenty of people willing to sacrifice a few degrees of cooling during peak hours to save a few bucks, and this gives them a way to do so.

Of course, these (presumably price-sensitive) consumers will have to buy a Nest to do so.

[sanderjd]

It is useful, but not particularly progressive. It's typically called "residential demand response". I worked at a company that has been building programs like these for many utilities for a long time. Typically the utility pays for the thermostats (or cheaper equipment attached directly to an A/C compressor) and gives the customers some sort of incentive for participating, like a yearly rebate.

Nest is an interesting entrant into the market because they can come to a utility and say "we already have X of your customers hooked up, you don't have to pay for anything besides the service!" One potential downside is that it is likely the utility will want more of their customers to participate in their demand response program than the number of Nest-owners. Despite its success, the Nest is still a luxury item, and these programs work best at scale. This could make it awkward for the utility to work with another provider, unless Nest is open to partnerships (which they may well be). It's a great play for Nest though, because now they have utilities aligned with their goal of selling more of their thermostats, which is probably really good for marketing.