Thermostatically controlled loads (TCLs) have become a major tool for the demand response (DR) program when air conditioners cause peak loads in a day during the winter or summer. To solve the problem of a direct load control with TCL usually affecting user comfort and hardly considering responsiveness, a power retailer air-conditioning load aggregation operation control and demand response method was proposed in this research. From the perspective of a power retailer, a compensation mechanism for TCL was constructed, which was composed of a basic incentive program and an additional incentive program. The basic incentive program aimed to encourage users with a low response degree to increase the response capacity in order to participate in DR. An auxiliary service market control strategy based on a new compensation mechanism of the electricity retailer was detailed, which fully considered the enthusiasm of the user in mobilizing the response and reducing the load reduction fluctuation when using the state-queuing (SQ) model. Case studies were provided to verify the effectiveness of the proposed method. Compared with other compensation schemes, the simulation results showed that the compensation mechanism provided in this research was more reasonable, and it could smooth the load and reduce fluctuations. The compensation distribution among the user groups could effectively control the uniform distribution in the user groups in the temperature range, and it could mobilize users at different temperatures to participate in DR.