With the development of renewable sources, the traditional operation method of controlling generation to deal with load fluctuation is being challenged. Demand response (DR) is an important scheduling resource, and the advance in information technology improved the responsivity of residential load. In this context, the load service entity (LSE) realizes the supply-demand interaction of residential loads through price mechanism. Firstly, home energy management system (HEMS) based on smart meter is established by optimizing operation of household equipment to minimize energy cost. Secondly, the pricing mechanism of the LSE is derived according to the power supply cost function. Electricity prices and response power of HEMS are used as interactive information to coordinate the responses of users and optimize the overall load. Considering that distributed optimization of users may fail to converge, penalty for load changes between two consecutive iterations are added to the objective function. Through simulations, the influence of the above strategy on LSE and users is analyzed, and the effectiveness on smoothing the power curve and reducing household energy cost is verified.