The New York Times is running a story today describing a study run in the northwest. Utility customers were given a digital "knob" to turn on a web page. The position of the knob indicated to the electric company how much discomfort the customer was willing to trade for lowering his or her electric bill.

The idea is simple: Choose a range you're willing to live with. That sets a range for your demand. The electric company then aggregates demand from all customers. The result is a range of electricity demand which they can go to market to purchase.

It's a pretty clever idea. By going to market with a range of supply to purchase rather than a fixed amount, the utility company gains purchasing power. If the price for an extra kW of power is incrementally too high, they can choose not to purchase it. The customers for whom the extra electricity was not purchased, by extension, don't have to pay for it either.

It's not unlike your deciding to buy a smaller bunch of bananas at the supermarket this week because the price was higher than you like.

I can see the next step in this progression might be a digital tool which will allow consumers to decide how to allocate energy within our own homes. Rather than a single control on a web site at the utility company which controls how much we're willing to buy, how about a series of them which control how we want to use it?

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