Research The Orchestra Needs A Conductor: Why DSOs Are Key To Grid Harmony The DSO model transforms the utility into an active manager of bidirectional electricity flows — coordinating generation, storage, and demand in real time. DSO implementation requires foundational technology and a regulatory framework designed to support it from the start. Various DER participation models are available to suit different markets, but all demand coordination between the DSO and the market operator. International DSOs offer a practical roadmap for the U.S. — with proven approaches to T&D cooperation, DER integration, and grid constraint management. DSOs can address affordability by operating customer-sited resources as grid assets, managing peak loads, and deferring capital investment. New research from SEPA on how the DSO model can improve grid reliability, incorporate distributed energy resources, and reduce long-term costs for customers. The distribution system is becoming the most consequential layer of the grid. As electricity demand grows, distributed energy resources multiply, and as extreme weather tests infrastructure resilience, utilities are under pressure to do more with systems that were not designed for today’s challenges—while keeping costs manageable for customers. The distribution system operator model offers a structured response. By actively managing bidirectional electricity flows, operating customer-sited resources as grid assets, and incorporating demand flexibility into planning, a DSO can improve reliability, defer capital investment, and reduce long-term costs. Several states and jurisdictions are already exploring what adoption could look like in the U.S. context. This report outlines what it takes to implement a DSO successfully—the foundational technology and regulatory requirements, the range of available DER participation models, and lessons from international case studies that offer a practical roadmap for U.S. implementation. Authors: Lakin Garth, Senior Director – Grid Strategy, SEPA Rusty Haynes, Senior Manager – Research and Industry Strategy, SEPA Weston Dengler, Senior Analyst – Research and Industry Strategy, SEPA Neil Veilleux, Vice President of Market Development, Uplight Utilia Amaral, President, MarketStep Interested in this topic? Learn more about SEPA’s Distribution System Working Group or request a briefing for your team. Join the Working Group or request a briefing Download the Report Name* First Last Email* Company*State (Optional)What state do you live in?AlabamaAlaskaAmerican SamoaArizonaArkansasArmed Forces AmericasArmed Forces EuropeArmed Forces PacificCaliforniaColoradoConnecticutDelawareDistrict of ColumbiaFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaNorthern Mariana IslandsOhioOklahomaOregonPennsylvaniaPuerto RicoRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUS Virgin IslandsUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyomingTitle* Sign me up to receive updates on ?