Abstract. Recently smart demand side management (DSM) is a very important tool that permits customers to take right decisions for their energy consumption and helps the energy utilities to decrease the over load demand and reshape the load curve. This paper proposes an optimized DSM technique based on smart metering uses different techniques such as load shifting and peak clipping to minimize domestic power consumption especially during load peaks. A new optimization technique (Bat Algorithm) is applied on proposed system and then compares results with other optimization techniques (Genetic Algorithm and Interior point Algorithm) to optimize the minimum consumption during peak hours according to load type. A control algorithm is applied to the proposed system to achieve the load shifting and load clipping according to the optimization results