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Our objective is to allocate power to air conditioners in a fair manner when the demand for power exceeds the supply or when the load in regions of the network exceeds the capacity of the transmission links. This is an alternative to the current practice of brown outs or black outs and to the proposed pricing mechanisms that curtail demand. The procedure operates on a smart grid. Customers request a thermostat setting for their air conditioner, and the power company sets the thermostat to fairly allocate the available power. We describe 1) simple techniques to predict changes in power consumption for modest changes in the setting of a thermostat in each residence, 2) algorithms to apply two fairness metrics used in communications networks to power allocation, 3) an algorithm to control power to different parts of a capacity constrained distribution network, and 4) a practical procedure to apply these techniques.