Utility remote control of smart thermostats

Electric utilities across the United States can remotely raise the temperature on a customer-owned smart thermostat that is enrolled in a demand-response program, in exchange for a bill credit. The programs are marketed as opt-in, and the enrollment terms promise that participants can override any individual event; Salt River Project tells Arizona customers that BYOT participants always have the flexibility to opt out of conservation events if necessary. On August 30, 2022, Xcel Energy in Colorado disabled that override for about 22,000 enrolled AC Rewards customers during a heat wave, locking some thermostats while indoor temperatures in some homes reached as high as 88 degrees, the first time in the program's six-year span that customers could not override the change.

How the programs work

A demand-response thermostat program pays a residential customer a credit in return for letting the utility adjust the customer's air conditioning during a small number of peak-demand windows, which the utilities call conservation events. In Arizona, Salt River Project (SRP) runs the Bring Your Own Thermostat (BYOT) program, which it began as a pilot in 2017 and opened to all customers in 2020.

During an event, SRP automatically raises the thermostat setpoint by no more than four degrees to lower demand during peak hours. The 2021 program rules cap the season at no more than 15 conservation events, running May 1 through October 31, and pay a $50 bill credit per device plus a $25 credit per device at the end of the season, for up to two devices per customer. Before an event, the system pre-cools the home so the AC stops running at full output once the setpoint is raised.

Salt River Project's own program page tells BYOT customers that during an event the utility will automatically adjust your thermostat temperature by no more than four degrees.

The utility does not talk to the thermostat directly. A demand-response management platform sits between them: SRP selected EnergyHub's distributed-energy-resource management system to run BYOT, a deal Utility Dive reported in July 2018. The platform reaches each device through the thermostat manufacturer's cloud, which is why the practical eligibility requirement is owning a cloud-connected thermostat rather than any specific utility hardware.

Enrollment and consent

The programs are voluntary, and the enrollment pages foreground a standing override. SRP's administrator page tells customers You can opt out at any time during a conservation event from your mobile device, web browser, or thermostat, and states that a customer will be notified before an event is activated. The marketplace page repeats the promise: the customer is notified the day of each event and can opt out as needed.

SRP's BYOT enrollment page lists the program terms, including the promise that You can opt out at any time during a conservation event from your mobile device, web browser, or thermostat.

SRP's enrollment page sets one firm requirement: If you are an SRP residential customer and own a smart thermostat to control your central AC, you may be eligible to participate. Because the practical requirement is a cloud-connected thermostat, enrollment can ride along with other sign-up flows, including a sweepstakes entry, as it did in Texas.

EnergyHub's Smart Savers Texas terms state that by participating you are automatically entered into the sweepstakes promotion and authorize the sponsor to automatically adjust your thermostat, as required by the Program at times indicated by Utility.

In Texas, the enrollment funnel ran through a sweepstakes. EnergyHub's Smart Savers Texas terms of service, a 2020 snapshot for the program period of May 1 through September 30, 2020, told participants that by joining the program you are automatically entered into the sweepstakes promotion. The same terms authorized the sponsor to automatically adjust your thermostat, as required by the Program at times indicated by Utility, and let a participant opt out of any single adjustment from the thermostat or app, or out of the program entirely by email. The terms set no cap on adjustments: EnergyHub estimated up to eight demand-response events through September 30, 2020, and stated there is no limit to the number of adjustments per season and no limit to the adjustments for system testing.

During a June 2021 Texas heat wave, customers reported that their thermostats had been raised remotely and said they had not known a utility could do that. PolitiFact's Brandon Mulder examined the claim in July 2021 and found that the overrides were real but that the affected customers had enrolled through the Smart Savers Texas program administered by EnergyHub, which signs customers up through their thermostat manufacturer. Some of those customers said they had not been fully aware of the program's terms.

California rebate enrollment requirement

In California, the Public Utilities Commission (CPUC) tied a smart-thermostat rebate to demand-response enrollment. In a decision adopted December 2, 2021 in proceeding R.20-11-003, the CPUC authorized up to $22.5 million in incentives to install smart thermostats in hot climate zones. The decision directs Pacific Gas and Electric, Southern California Edison, and San Diego Gas & Electric to run the program, which set a $75 rebate per non-ESA thermostat and a target of up to 300,000 devices.

The adopted rule is an affirmative pre-enrollment requirement. The decision text states the program will require customers, except those qualified for ESA, to pre-enroll in a CAISO market integrated supply-side DR program, and the ordering paragraph repeats that non-ESA customers shall pre-enroll in such a program to receive the rebate. Customers who qualify for the Energy Savings Assistance program (low-income customers) are exempt from the requirement.

A default-enrollment scheme had been proposed in the same proceeding, by Google. In opening testimony filed September 1, 2021 on behalf of Google LLC, witness Aaron Berndt recommended:

Customers receiving a smart thermostat incentive should be defaulted into an automated DR program... unless they specifically request another program or choose to opt-out and not receive the demand response enrollment incentives.

The CPUC did not adopt that opt-out default. The decision records that the requirement of DR enrollment was supported by Google Nest, with an option to opt out of the DR program and forego the smart thermostat rebate, and that PG&E opposed mandatory DR program enrollment. What the CPUC adopted is the pre-enrollment condition; the opt-out default remained Google's recommendation.

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  Section 4.9 of the CPUC proposed decision in R.20-11-003 states the program will require customers, except those qualified for ESA, to pre-enroll in a CAISO market integrated supply-side DR program.
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  Google LLC's opening CPUC testimony recommended that customers receiving a smart-thermostat incentive should be defaulted into an automated DR program unless they opt out, a default the commission did not adopt.

The 2022 Xcel Colorado override lockout

In Colorado, Xcel Energy's AC Rewards program disabled the customer override during a single event on August 30, 2022. About 22,000 enrolled customers received a message that their thermostat was locked due to an energy emergency, and for hours they could not change it. The Register reported the more precise figure of 22,190 customers, roughly 1.5 percent of Xcel's 1.5 million Colorado customers, all of whom had signed up for the voluntary AC Rewards program. One participant, Tony Talarico, said his thermostat was locked at 78 or 79 degrees; other customers reported indoor temperatures as high as 88 degrees.

The lockout followed a generation failure. Xcel's regional vice president Hollie Velasquez Horvath attributed the event to an unexpected outage at the Comanche 3 coal plant in Pueblo, describing the cause only as a tube issue. She told Colorado Public Radio the plant gave the utility no warning:

Comanche 3 went down quickly. We didn't have a lot of time to react, which is why we didn't have time to give notice.

Shawn White, Xcel's director of demand-side management, told Colorado Public Radio the company had adjusted thermostats 35 times in the program's six-year history; in each of those 35 cases customers had been given a chance to override before the change took effect. August 30, 2022 was the first time Xcel throttled thermostats without warning customers and without giving them a chance to override.

Xcel defended the action as a term of a voluntary program. Emmett Romine, Xcel's vice president of customer solutions and innovation, said customers who enroll agree to give up some control to save energy and improve reliability, and that the event was a bit uncomfortable for a short period of time, but it's very, very helpful. Colorado's AC Rewards pays a $100 enrollment credit and $25 for each year a customer stays enrolled, a different credit structure from SRP's $50-plus-$25. Talarico, who had enrolled to save energy, said he had not understood the program could take that much control away, telling Denver7: To me, an emergency means there is, you know, life, limb, or, you know, some other danger out there.

Scale and administrators

The programs operate at scale because a few cloud platforms aggregate thermostats across many utilities. Google reported that as of the end of 2023, more than 110 utilities across the US and Canada had partnered with Google Nest to reach over one million actively enrolled customers through the Nest Rush Hour Rewards program. During California's 2022 heat wave, Google said Rush Hour Rewards participants in the state contributed 75 MW of peak reduction capacity. EnergyHub plays the same aggregating role for SRP's BYOT and for Smart Savers Texas.

Arizona shows how the enrolled base grew. SRP reported 36,000 participating customers and up to 70,000 kW (70 MW) of reduction per event in 2021. By 2025, KJZZ reported that SRP had about 100,000 enrolled thermostats and could shed up to 125 MW per event, adjusting enrolled thermostats by about four degrees roughly six or seven times per summer. Arizona Public Service (APS) runs a comparable program called Cool Rewards, and Tucson Electric Power runs one as well. Even after that growth, the enrolled devices are a minority of each utility's customers: with about 100,000 enrolled devices each, SRP serves about 1.1 million customers and APS about 1.4 million.

Regulatory and legislative context

The wholesale-market rules that make aggregated thermostats valuable come from the Federal Energy Regulatory Commission (FERC). FERC Order No. 2222, issued in 2020 with updates in 2021, directs regional grid operators to write market rules that let aggregations of distributed energy resources participate directly in wholesale markets; the order's explainer lists smart thermostats among the qualifying resources and states that such aggregations can be as small at 100 kW. The explainer notes that Order No. 2222 does not apply in the Texas ERCOT area, because ERCOT is outside FERC's jurisdiction, and that ERCOT runs its own distributed-resource pilot. Order 2222 governs how aggregators bid thermostat capacity into the market.

In Ohio, a bill would put this kind of program in statute. State Representative Roy Klopfenstein (R-Haviland) introduced House Bill 427, which would let utilities raise a participant's thermostat or cycle certain appliances such as laundry or dishwashing on the hotter days of the year; the bill provides that any participant can override an individual reduction. An earlier, similar bill died after Americans for Prosperity Ohio lobbied against it; that bill would have enrolled Ohio consumers automatically, requiring them to opt out, and charged a $1.50 monthly fee. In September 2025, the Ohio House Energy Committee held a hearing on the bill, at which Klopfenstein testified in support and presented amendments to clarify the program's enrollment provisions.

In Arizona, the programs depend on regulator-approved utility budgets. On December 3, 2025, the Arizona Corporation Commission scaled back APS's demand-side-management budget but preserved the Cool Rewards thermostat program, KJZZ reported.

See also

• Smart meter
• National Grid USA smart meter data collection in New York and Massachusetts
• Invitation Homes
• Features on demand