Balancing electricity supply and demand is a critical challenge in power system operation, particularly with the growing reliance on inherently variable renewable energy sources. Direct Demand Side Management (DDSM) offers a promising solution by directly controlling energy consumption to stabilize the grid. Uruguay, a regional leader in renewable energy, faces increasing challenges due to its high share of wind and solar power. This study explores the implementation of a DDSM program using residential electric water heaters (EWHs) in Uruguay. By leveraging the thermal storage capacity of these devices, the program aims to reduce generation, transmission and distribution costs while minimizing disruptions to users. The study proposes a DDSM program and evaluates its impact by modeling the interruption capacity of EWHs using physical dynamics models, historical consumption data, and performing simulations with MOP, a specialized software for simulating and optimizing the operation of power systems developed by UTE, the state owned power utility of Uruguay. The findings show that the DDSM strategy can significantly lower peak demand, reduce operational costs, and improve system flexibility, positioning it as a sustainable solution for future energy management. Specifically, the results show a 2% reduction in peak demand, 4 million USD in savings from generation costs, and 18.5 million USD in grid costs, representing up to 1.5% of the total annual system expenses.