A virtual thermostat system and method are provided. The method accepts commands via a virtual thermostat interface for establishing temperature set points for a plurality of zones. Energy consumption information is also accepted from a plurality of energy consumption units. Each unit consumes energy at an associated peak power to supply a controlled temperature medium to a corresponding zone. The method also accepts temperature measurements for each zone. Then, consumption commands are sent to each energy consumption unit in response to associated zone temperature set points, while insuring that a combined peak power of the energy consumption units is less than a maximum peak power threshold. In one aspect, the virtual thermostat accepts temperature measurements from a plurality of physical thermostats, each associated with an energy consumption unit. Then, consumption commands are relayed to the energy consumption units via associated physical thermostats.