  Motivated by the growing importance of demand response in modern power
system's operations, we propose an architecture and supporting algorithms for
privacy preserving thermal inertial load management as a service provided by
the load serving entity (LSE). We focus on an LSE managing a population of its
customers' air conditioners, and propose a contractual model where the LSE
guarantees quality of service to each customer in terms of keeping their indoor
temperature trajectories within respective bands around the desired individual
comfort temperatures. We show how the LSE can price the contracts
differentiated by the flexibility embodied by the width of the specified bands.
We address architectural questions of (i) how the LSE can strategize its energy
procurement based on price and ambient temperature forecasts, (ii) how an LSE
can close the real time control loop at the aggregate level while providing
individual comfort guarantees to loads, without ever measuring the states of an
air conditioner for privacy reasons. Control algorithms to enable our proposed
architecture are given, and their efficacy is demonstrated on real data.
