A basic introduction for further research can be found here:
http://en.wikipedia.org/wiki/Demand_response

Keep in mind that current technology in place and working in California is to use an Ethernet (Internet) signal over the power lines, thru the service meter, and allow the Utility Control Center to communicate with the thermostat temp setting and the AC on / off relay (homes and busineses). That would be automated computer control by neighborhood, city, or utility wide. The idea is to be able to control millions of homes in block fashion in order to maintain the grid.

(Among other methods,ie wireless etc etc)

Pilot project, stay tuned for roll out.