A system and method of controlling aggregated thermostatically controlled appliances (TCAs) for demand response is disclosed. A targeted load profile is formulated and a forecasted load profile is generated. The TCAs within an "on" or "off" control group are prioritized based on their operating temperatures. The "on" or "off" status of the TCAs is determined. Command signals are sent to turn on or turn off the TCAs. And a method comprising: a. sending a primary response signal to the indirectly controlled loads as a primary response; and b. sending a secondary response signal to the directly controlled loads to compensate for discrepancies between targeted and actual output results of the primary response.
