On the hottest days of the year, it's not uncommon for regional electricity systems to become so overloaded by demand that they come within a hair’s breadth of failing completely. (It happens in Texas all the time.)
Fortunately, utilities have come up with a cheap and easy way to overcome this problem: they offer their customers a cash incentive to sign up for a special kind of thermostat over which the utility has limited control. Then, when it gets nasty out, the utility can literally save the grid by turning up the temperature in your home just a teeny tiny bit. This is what's known as "demand response."
The cumulative effect of knocking down the energy consumption of thousands (or tens of thousands) of central AC systems can be the equivalent of firing up an entire power plant. Not only is this good for the environment, it's great for keeping down costs. On the hottest days of the year, any power plants that aren’t running over capacity get to auction off their electricity, causing it to shoot up to 50 times the usual price.
So even though you've probably never heard of demand response, it turns out it's one of the best examples of large-scale energy efficiency currently in use. If you're a homeowner in California, New York City, or Baltimore you can sign up for it today, and even if you're not, it's very likely to be an option for you in the near future.
And the whole thing works through information technology, making an end run around the normal problems of building new infrastructure.
