> Grandmas don't want to be adjusting their Air Conditioner on a second-by-second basis due to price fluctuations. Utilities effectively buffer this movement by aggregating demand and purchasing enough to meet that demand.

This is how Nest makes money. They serve as demand response. You sign up to get a credit on your electric bill, and when demand is extremely high, a utility can signal to Nest to reduce demand for 15 minute increments; its cheaper than firing up a peaking natural gas plant.

https://nest.com/energy-solutions/#demand-response