The use of data from residential smart maters can help in the management and control of distribution grids. This provides significant benefits to electricity retailers as well as distribution system operators, but raises important questions related to the privacy of consumers information. In this study, an innovative Differential Privacy (DP) compliant algorithm is developed to ensure that the data from consumers smart meters is protected. In addition, several cost allocation mechanisms based on cooperative game theory are used to ensure that the extra costs are divided among the participants in a fair, efficient and equitable manner. Comprehensive results show that the approach provides privacy preservation in line with the consumers preferences and does not lead to significant cost or loss increases for the energy retailer. In addition, the novel algorithm is computationally efficient and performs very well with a large number of consumers, thus demonstrating its scalability.