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EcoFactor Launches Its First Service in Texas

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EcoFactor, the 4-year-old startup that makes software that intelligently manages connected thermostats and reduces home energy consumption, has launched its first commercial service for utility Oncor in Texas. Yeehaw. While EcoFactor has been trialling and piloting its service since 2007, Oncor customers in the Dallas and Ft. Worth areas of Texas are now officially the first EcoFactor customers.

EcoFactor’s energy efficiency program is part of Oncor’s Take a Load Off Texas program and will provide demand response services. The startup’s algorithms take into account things like outside weather, the physical characteristics of the home, and manual input from the home owner, and automatically tweaks the customer’s thermostat every minute. The idea is to cut home energy consumption from heating and cooling (the bulk of a typical energy bill) in tiny increments. Over a month EcoFactor says it can save 20-30 percent off of the heating and cooling costs on an energy bill and the customer won’t even notice.

That subtle approach is quite a contrast from the more traditional demand response programs, where a provider will commonly ask a building owner (mostly industrial and commercial right now, but sometimes residential) to manually turn down their air conditioning, lighting or other appliances during a specific time on a specific day. EcoFactor’s CEO John Steinberg explained the difference between EcoFactor’s demand response and the traditional approach to me last year as “traditional demand response concentrates on five days a year, while EcoFactor focuses on 365 days a year.”

EcoFactor is actually even more focused on helping consumers cut energy and save money on their energy bills eventually (as opposed to helping utilities manage the grid better). The company thinks one of its main markets will be partnering with service providers like cable companies, telcos, and DSL-providers that are interested in offering energy management to customers. Verizon (s VZ) has said it is interested in adding energy management to its fiber service, and is working with a startup to use its 3G network for home energy management. EcoFactor’s service needs a home Internet connection, which is another reason why partnering with a broadband service provider could be a good move.

EcoFactor’s first commercial customer has been a long time coming. When the company officially launched and came out of stealth last November, it also announced its Oncor deal. EcoFactor also raised $2.4 million in December, and more recently another $3.5 million from investors including RockPort Capital Partners and Claremont Creek Ventures.

For more research on the smart grid check out GigaOM Pro (subscription required):

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