This paper studies a coordination mechanism based on heuristic rules to manage the energy demand in a residential smart grid scenario and evaluates the survivability of the system when failures occur in the communication infrastructure. This is achieved by modeling residential demand response considering Plug-in Hybrid Electric Vehicles (PHEVs) as part of the loads, local renewable generation capability and variable energy pricing based on a Time of Use (TOU) scheme. A mathematical model of the system is built based on realistic data, and the evaluation of the survivability of the system is carried out using Monte Carlo simulations and statistical experiment design techniques, where the probability of overloading the distribution system is derived for different scenarios. Results obtained show that the coordination mechanism is able to achieve energy efficiency and cost saving for residential users when the energy consumption is managed properly. At the same time the probability of overloading the distribution system can be reduced. The efficiency and economic savings depend on the potential of renewable sources in the region considered and the survivability of the system depends on a reliable communication infrastructure.