Nowadays generation capacity in traditional grid depends on fossil fuels and contributes significantly to the increase of pollution emission. In deregulated grids in addition to using demand response programs (DRPs) to reducing the cost of electricity production, peak clipping and improve reliability use of green Plants such as hydro plant, wind plant become widespread. In a smart grid, end users according to their consumption, use one of the DRPs in reduction the cost of energy consumption as well as leads improvement in social welfare. DRPs change the normal pattern of end users consumption that these changes modeled in price elasticity matrix (PEM). The framework of this paper is reducing the cost of pollution generated by plants with a view to minimizing the overall system cost. The objective function presented in this paper is the overall system cost that presented a new method for modeling the DRPs in PEMs, cost of energy produced by independent power producers units and pollution contribute to the plants. The numerical calculation of this paper calculated in a Low voltage residential network and consumers use time of use program (TOU) for load management. The Load Serving Entities (LSEs) aggregate the reduced load compared to normal pattern and participate in the pay as bid (PAB) Stackelberg competition market that called demand side bidding.