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Consider a smart grid system in which every user may or may not choose to participate in Demand Side Management (DSM). This will lead to a general co-existence problem between participant and non-participant users. To gain insights, first, we show that some existing electricity billing mechanisms suffer from severe fairness and co-existence defects. Next, we propose an alternative billing mechanism that can tackle the coexistence and fairness problems by taking into account not only the users' total load, but also the exact shape of their load profiles. Our analytical results provide mild sufficient conditions on the choice of system parameters to assure fairness. Furthermore, our simulation results confirm that the proposed billing mechanism significantly improves the fairness index of the DSM system.

Demand Side Management (DSM) will be one of the most important parts of future smart power grid. The DSM algorithms help consumers to be more active contributors in the power system in order to achieve system objectives by scheduling their shiftable load. In this paper, we review the challenges in this area of research by categorizing the DSM problems into four important categories. The load scheduling can be done using a proper two-way communication network which has its own challenges in the smart grid. The important issues of security and privacy are considerable in every communication network and consequently in DSM network system. On the other hand, successful DSM programs need consumers' contribution in the system which can be achieved in a fair system. Recently, there are some works on the fairness of the DSM algorithms with different definition for the fair system.