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Chicago’s top power company wants to install a million smart thermostats in homes by 2020

A Nest thermostat installed in a home in Provo, Utah. (Photo illustration by George Frey/Getty Images)

The single biggest way we use energy in our homes is through heating in winter. The third biggest is through cooling in summer. For most of us, in-home thermostats govern both of these functions — which is what makes an announcement out of Chicago on Thursday so potentially significant.

EPA Administrator Gina McCarthy was on hand as ComEd, the biggest power company in Illinois with 3.8 million customers, announced a program designed to get 1 million “smart” thermostats into homes in its service area by 2020. The utility will accomplish this by discounting the cost of Nest and Ecobee thermostats dramatically, providing rebates up to $120 on devices that typically cost $249. The program includes the participation of gas utilities Nicor Gas, North Shore Gas and Peoples Gas.

ComEd, which is a part of Exelon, isn’t the only utility company in the country pursuing the installation of smart thermostats to reduce customers’ electricity use, particularly during peak hours and on extremely high-demand days, which can strain the grid. The large utility Southern Co., for instance, is giving away Nest thermostats to customers who sign up for a “smart usage” rate plan in which power costs more at times of peak demand and less at other times.

Still, the new Chicago and northern Illinois program is the “largest effort of its kind in the country,” according to the Environmental Protection Agency. It is being announced as a partnership with advocacy groups, including the Environmental Law and Policy Center, which has lobbied ComEd to improve its energy-efficiency programs, and is celebrating the new initiative.

“We just don’t know of anybody who is doing it at this level, and this magnitude, where they’ve set a target of 1 million over the next five years,” says Rob Kelter, a senior attorney with the Environmental Law and Policy Center. “This is the start of some new, innovative efficiency programs.”

“We think the savings are going to be substantial, they’re going to outweigh the extra costs that a customer would have to incur to install them,” Val Jensen, ComEd’s senior vice president for customer operations, says of the smart thermostats. Jensen likens them to the next thing to come along in energy efficiency after the compact fluorescent lightbulb.

“In the past 10 years, that’s been the only tangible way you can talk to people about energy efficiency,” he says of CFLs, “and these new thermostats provide an exciting way to get customers’ attention.”

The program comes as the Obama administration’s Clean Power Plan will exhort states and their power companies to cut their greenhouse gas emissions sharply, and increasing energy efficiency — in this case, getting an adequate amount of home heating and cooling while using less energy overall — could be one way of doing so.

Analysis by the Environmental Law and Policy Center suggests that a million smart thermostats installed in northern Illinois would lead to 709,000 metric tons fewer carbon dioxide emissions per year. It also estimates that, for customers swapping out a manual thermostat for a smart one, the savings could be as much as $131 annually on their bills (both electricity and gas).

The smart-thermostat revolution has been coming on strong of late, and none too soon — growing research has suggested that “programmable” thermostats, which do have theoretical potential to save users a lot of money and electricity if properly used, often baffle and befuddle people.

The basic idea is to program the thermostat to turn down the air conditioning or heating during the hours when you’re away from home, when running either would waste a great deal of energy. Another way to save electricity, meanwhile, is to program the device to lower the A/C on summer nights when it’s cooler outside and to take down the heat during winter days when it’s warmer.

Theoretically, programmable thermostats can let you do that, but because of problems with their use, the new generation of “smart” thermostats, such as the Nest, are being turned to perform the same job (and others). These WiFi-enabled devices learn an individual’s routines and interact with him or her to figure out how energy savings can be achieved and can automatically lower the air conditioning or heating if they sense that nobody is home.

According to Nest, its devices can save, on average, 10 to 12 percent on heating bills and 15 percent on cooling. Ecobee, another smart thermostat maker, claimed even higher savings — an average of 23 percent.

But there is also probably a benefit to the power companies — if the smart thermostats can be paired up with “smart rates,” as Southern Co. is doing, then there will be an incentive for customers to use less at times of peak demand, which will better help ComEd manage the grid.

So, in sum, it’s the kind of partnership that we’re likely to see more and more of.

“We think ultimately these learning thermostats, and their capability, is going to give us some really interesting options for customers to manage their energy use,” ComEd’s Jensen says.