PowerMatching City is a living lab Smart Grid demonstration in the Netherlands consisting of 25 interconnected households (phase-I). It focuses on the development of a market model for intelligent network operation under normal market conditions that allows simultaneous in-home optimization (pro-sumer), technical coordination (distribution system operator) and commercial coordination (balance responsible). The coordination mechanism, provided by the agent based PowerMatcher technology, is extended to allow these simultaneous optimizations. Mature smart grids require a transparent coordination mechanism which allows various energy sources and appliances to be interconnected on a non-segregated and plug-in basis. It should seamlessly combine distributed generation with demand response. A generic design has been developed that allows seamless coordination of hybrid heat pumps, μ-CHPs, electric cars, smart appliances such as freezers, washing machines etc. in a single ICT solution. End-user acceptance is guaranteed by advanced comfort control mechanisms and monitored in a participating design program.