The next evolution of the smart grid technology will allow customers to make more informed decisions about their energy consumption, adjusting both the timing and quality of their electricity use; this ability to control usage is called demand side management (DSM). DSM is the process by which electric utilities, in collaboration with consumers, achieve predictable and sustainable changes in electricity demand .in order to ensure stability on the electricity grid, electricity supply and demand must remain in balance in real time, traditionally utilities have called upon peaking power plants to increase power generation in order to meet the rising demand. DSM which includes energy efficiency and demand response (DR) works from the other side of the equation instead of adding more generation to the system; it pays energy users to reduce consumption. Utilities pay for DSM capacity because it's typically cheaper and easier to procure than traditional generation.

The main objective of this paper is to apply two techniques of DSM namely, Load shifting and peak clipping on residential loads. The simulation results obtained from the Load shifting technique are compared with those obtained from Peak Clipping technique to verify the feasibility of the proposed methods. The results show that the load shifting performs better than peak clipping in terms of Load Factor and electricity bill.