When Rob Kelter, senior attorney with the Environmental Law & Policy Center in Chicago, suggested that Commonwealth Edison and other utilities in northern Illinois install 1 million smart thermostats in the next few years, George Malek, director of energy-efficiency services at ComEd, thought he was crazy.

Utilities in Illinois run their energy-efficiency programs on three-year cycles. “We can only see so far out,” said Malek, who added that ComEd currently installs about 2,000 thermostats annually, most of them just the old-fashioned programmable variety. ComEd is currently in the middle of one of those three-year cycles for its energy-efficiency program.

Kelter was persistent, and some existing relationships worked in his favor. Now, ComEd, Nicor Gas, Peoples Gas and North Shore Gas are tweaking their energy-efficiency programs to offer rebates for customers who buy a Nest or ecobee 3 thermostat and install it themselves.

ComEd serves about 3.7 million customers across northern Illinois. It has partnered for years with gas utilities in its territory to offer joint energy-efficiency programs, which offer deeper savings, since most households rely on natural gas for heating.

The utilities have long offered free, non-connected programmable thermostats or rebates for ecobee thermostats that the utility installs. More recently, the utility also offers a $125 rebate for customers who install a Honeywell Lyric, Nest or ecobee 3 through a professional installer. Most of these thermostats retail for about $250.

But with the need to spend efficiency dollars, “We’re really searching for what is that next generation of energy efficiency for residential customers,” said Malek.

The energy savings data around programmable thermostats has been dismal for years. Many of them are frequently put into “hold” mode and do not run on a schedule that would save energy and money the way that models suggest they should. Connected smart thermostats are increasingly being leveraged by utilities, but entrenched programs are often slow to die.

Now, to help get to the ambitious goal of 1 million thermostats, customers can receive a $100 to $120 rebate if they buy an ecobee 3 or Nest and install it themselves. “We’re trying to remove as much friction from the rebate process as possible,” said Ben Bixby, director of energy products at Nest.

Even with all of the options of installation, Malek has no idea if the utilities can get to 1 million thermostats. “It’s an aspirational goal,” he said. “We want to be in every home we can.” In its next efficiency filing, that may include looking at options for connected window AC controls or additional smart thermostats.

The utilities have not aggressively marketed the thermostat offering, but that will change with the robust goals. They will also have the advantage of companies like Nest advertising the program as well.

For the first year, they are hoping for about 25,000 thermostats. It will have to expand considerably, especially in later years once the utility has more measurement and verification data. The amount of realized savings will likely impact how much ratepayer money can go into the program in the future. The utilities have a ballpark idea, hoping for about 300 kilowatt-hours per year for each home with an installed thermostat.

The need for slashing kilowatts is real. “We’re running out of measures, in all honestly,” Malek said of residential efficiency programs. “We’ve already replaced a lot of light bulbs.”

But the thermostats should allow for more than just lower baseline energy use. Nest is already working with ComEd for demand response. More smart thermostats mean more potential demand-response clients. Nest also just announced a tweak to its Rush Hour Rewards program that allows for winter deployment, shorter dispatch times and more location-based capabilities to help utilities expand residential demand-response programs. Large deployments of intelligent thermostats also offer the opportunity to test different rate plans. “We hope it all aligns with the utility of the future,” said Malek.

“It puts an enormous distributed energy resource on the map for northern Illinois,” said Bixby. “We’re effectively creating many clean virtual power plants that the utility could need in the future.”