One of the focus areas of the smart-grid initiative is the residential level demand response. Recent surveys have analyzed price-responsive demand response optimization, mathematical modeling of demand response, responsive demand forecasting, and communication requirements. This paper identifies the benefit of the demand response programs available in the literature and presents an approach to incorporate utility-focused demand response benefits into distribution system operation. A two-stage demand-side management method is proposed using modified AC optimal power flow to maintain system requirements such as minimal deviations in nodal voltages and maintaining power factor. The results have been analyzed further by categorizing them into two areas; how the rescheduling has benefitted the consumers and the utility.