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Load shedding is the only Demand Side Management program taken by the utilities to reduce the peak load of the power system suffering from the capacity shortage in China. Three main contributions to improve the current load shedding program are elaborated in the paper: (1) The yardstick competition theory is innovatively applied in the load shedding for industrial consumers, which will lead to a significant reduction in energy consumption and pollutant emission. (2) A novel load shedding strategy is proposed that utilizes the notion of overlapping rate to take into account the characteristics of different load profiles when the program is implemented. (3) The modeling of combined optimization of the load shedding program and the maintenance scheduling problem of the distribution network is performed. Finally, case study is carried out. The test results demonstrate the feasibility and effectiveness of applying the proposed method.