US 8,412,488 B2 
1. 
SYSTEMAND METHOD FOR USINGA 
NETWORK OF THERMOSTATS AS TOOL TO 
VERIFY PEAK DEMAND REDUCTION 
CROSS-REFERENCE TO RELATED 
APPLICATIONS 
This application is a continuation of U.S. patent applica 
tion Ser. No. 137037,162, filed Feb. 28, 2011, now U.S. Pat. 
No. 8,131.506 which is a continuation of U.S. patent appli 
cation Ser. No. 12/183,949, filed Jul. 31, 2008, now U.S. Pat. 
No. 7,908,116, issued on Mar. 15, 2011, which claims the 
benefit of priority under 35 U.S.C. S 119(e) to both U.S. 
Provisional Application 60/963,183, filed Aug. 3, 2007; and 
U.S. Provisional Application No. 60/994,011, filed Sep. 17, 
2007, the entireties of which are incorporated herein by ref 
erence and are to be considered part of this specification. 
BACKGROUND OF THE INVENTION 
1. Field of the Invention 
This invention relates to the use of thermostatic HVAC 
controls that are connected to a computer network as a part of 
a system for offering peak demand reduction to electric utili 
ties. More specifically, the present invention pertains to use of 
communicating thermostat combined with a computer net 
work to verify that demand reduction has occurred. 
2. Background 
Climate control systems such as heating and cooling sys 
tems for buildings (heating, ventilation and cooling, or HVAC 
systems) have been controlled for decades by thermostats. At 
the most basic level, athermostat includes a means to allow a 
user to set a desired temperature, a means to sense actual 
temperature, and a means to signal the heating and/or cooling 
devices to turn on or offin order to try to change the actual 
temperature to equal the desired temperature. The most basic 
versions of thermostats use components such as a coiled 
bi-metallic spring to measure actual temperature and a mer 
cury Switch that opens or completes a circuit when the spring coils or uncoils with temperature changes. More recently, 
electronic digital thermostats have become prevalent. These 
thermostats use solid-state devices such as thermistors or 
thermal diodes to measure temperature, and microprocessor 
based circuitry to control the switch and to store and operate based upon user-determined protocols for temperature Vs. 
time. 
These programmable thermostats generally offer a very 
restrictive user interface, limited by the cost of the devices, 
the limited real estate of the small wall-mounted boxes, and 
the inability to take into account more than two variables: the 
desired temperature set by the user, and the ambient tempera 
ture sensed by the thermostat. Users can generally only set 
one series of commands per day, and to change one parameter (e.g., to change the late-night temperature) the user often has 
to cycle through several other parameters by repeatedly press 
ing one or two buttons. 
As both the cost of energy and the demand for electricity have increased, utilities Supplying electricity increasingly 
face unpleasant choices. The demand for electricity is not 
Smooth over time. In so-called "Summer peaking locations, 
on the hottest days of the year, peak loads may be twice as 
high as average loads. During Such peak load periods (gen 
erally in the late afternoon), air conditioning can be the largest 
single element of demand. 
Utilities and their customers generally see reductions of 
Supply (brownouts and blackouts) as an unacceptable out 
come. But their other options can be almost as distasteful. In 
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the long term, they can build additional generating capacity, but that approach is very expensive given the fact that Such 
capacity may be needed for only a few hours a year. And this 
option is of course unavailable in the short term. When con 
fronted with an immediate potential shortfall, a utility may 
have reserve capacity it can choose to bring online. But 
because utilities are assumed to try to operate as efficiently as 
possible, the reserve capacity is likely to be the least efficient 
and most expensive and/or more polluting plants to operate. Alternatively, the utility may seek to purchase additional 
power on the open market. But the spot market for electricity, which cannot efficiently be stored, is extremely volatile, 
which means that spot prices during peak events may be as 
much as 10x the average price. 
More recently, many utilities have begun to enter into 
agreements with certain customers to reduce demand, as 
opposed to increasing Supply. In essence, these customers 
agree to reduce usage during a few critical periods in 
exchange for incentives from the utility. Those incentives 
may take the form of a fixed contract payment in exchange for 
the right to cut the amount of power Supplied at specified 
times, or a reduced overall price per kilowatt-hour, or a rebate 
each time power is reduced, or Some other method. 
The bulk of these peak demand reduction (PDR) contracts 
have been entered into with large commercial and industrial 
customers. This bias is in large part due to the fact that 
transaction costs are much lower today for a single contract 
with a factory that can offer demand reduction of 50 mega 
watts than they would be for the equivalent from residential 
customers it could take 25,000 or more homes to equal that 
reduction if these homes went without air conditioning. 
But residential air conditioning is the largest single com 
ponent of peak demand in California, and is a large percent 
age in many other places. There are numerous reasons why it 
would be economically advantageous to deploy PDR in the 
residential market. Whereas cutting energy consumption at a 
large factory could require shutting down or curtailing pro 
duction, which has direct economic costs, cutting consump 
tion for a couple of hours in residences is likely to have no 
economic cost, and may only result in minor discomfort—or none at all if no one is at home at the time. 
Residential PDR has been attempted. But there have been 
numerous command and control issues with these implemen 
tations. The standard approach to residential PDR has been to 
attach a radio-controlled switch to the control circuitry located outside the dwelling. These switches are designed to 
receive a signal from a transmitter that signals the compressor 
to shut off during a PDR call. 
There are a number of technical complications with this 
approach. There is some evidence that “hard cycling the 
compressor in this manner can damage the air conditioning 
system. There are also serious issues resulting from the fact 
that the communication system is unidirectional. When utili 
ties contract for PDR, they expect verification of compliance. 
One-way pagers allow the utility to send a signal that will shut 
of the A/C, but the pager cannot confirm to the utility that the 
NC unit has in fact been shut off. If a consumer tampers with 
the system so that the A/C can be used anyway, the utility will 
not be able to detect it, absent additional verification systems. 
One way in which some utilities are seeking to address this 
issue is to combine the pager-controlled thermostat with so 
called advanced metering infrastructure (AMI). This 
approach relies on the deployment of 'Smart meters' elec 
tric meters that are more sophisticated than the traditional 
meter with its mechanical odometer mechanism for logging only cumulative energy use. Smart meters generally include a 
means for communicating instantaneous readings. That com 
Appx80
Case: 23-1101 Document: 15 Page: 115 Filed: 05/09/2023