The evolution from traditional power networks to smart grid involves many aspects including data network transformation, distributed functionality, and two-way information flow between supplier and customer. Networks are transforming to the use of packet-based communications and the use of newer networking technologies, including optical, Internet Protocol (IP) and Multiprotocol Label Switching (MPLS). Functionality is being distributed to substations, transmission and distribution nodes, and to the customer site. Information flow evolves to two-way communication of rating, billing, and usage data between the customer and supplier (including “smart metering”). These changes introduce new reliability and security challenges for the power grid utility company. In the security domain, new threat vectors are introduced, and vulnerabilities and attacks related to data networking and information technology become more relevant. Security, reliability, and availability of the management and control network and functionality are business critical. This paper describes a methodology for assessing smart grid security, and trends in smart grid security that we have observed while applying this methodology. © 2012 Alcatel-Lucent.