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Customer energy storage offers a utility company a means to change electric energy use patterns, however, the costs and benefits to the utility and consumer are uncertain. As part of a national demonstration Public Service Electric and Gas Company (PSE&G) installed storage heating and storage water heating appliances in residential homes. These homes were monitored and compared to a group of similar homes using conventional appliances. The purpose of this two-part paper is to explore the possible design impacts on primary and secondary electrical distribution systems for two types of central ceramic residential storage heating systems. To explain the costs and benefits of storage heating and storage water heating, background information and a description of the demonstration are discussed in this part of the paper.