  In this paper we develop an algorithm for peak load reduction to reduce the
impact of increased air conditioner usage in a residential smart grid
community. We develop Demand Response Management (DRM) plans that clearly spell
out the maximum duration as well as maximum severity of inconvenience. We model
the air conditioner as a power throttling device and for any given DRM plan we
study the impact of increasing the number of power states on the resulting peak
load reduction. Through simulations, we find out that adding just one
additional state to the basic ON/OFF model, which can throttle power to 50% of
the rated air conditioner power, can result in significant amount of peak
reduction. However, the peak load that can be reduced is diminishing with the
increase in number of states. Furthermore, we also observe the impact of
inconvenience duration and inconvenience severity in terms of peak load
reduction. These observations can serve as useful guidelines for developing
appropriate DRM plans.
