If I understand things correctly, what they're basically saying is that the utilities can smooth out energy consumption across the entire grid. For instance, instead of everyone having the AC on for the first 10 minutes of every hour, they can turn 1/6 of the ACs on for the first 10 minutes, then turn those off and turn on the next 1/6 for the next 10 minutes, and so on. If that's the case, then instead of a huge spike (say, 80%) at the top of the hour and a huge dip (say, 10%) for the rest of the hour, the energy usage will be more constant across the whole hour (25% for the whole hour).

This should, in theory, reduce utilities costs in general, which ideally would be passed on to the consumers. And since everyone's Nest thermostat is already turning the AC up for 10 minutes, then the consumer isn't spending/losing any money on this -- they were already doing this, it's just at a different time that helps the utilities companies.

I think that's what they're talking about. It sounds like a cool plan, and a smart way for Nest to make big bucks.