One embodiment of the present invention provides a system for resolving energy imbalance within an electrical grid. During operation, the system receives an imbalance signal and current outputs from a regulation service subsystem and a demand response subsystem. Subsequently, the system generates control signals for controlling future outputs of the regulation service subsystem and the demand response subsystem based on the imbalance signal and the current outputs, and applies the generated control signals to the regulation service subsystem and the demand response subsystem.