WSNs (Wireless Sensor Networks) have been considered one of the very promising technologies for the implementation of smart grid. And security of WSNs becomes a central concern. The security solutions for generic wireless sensor networks cannot be directly used in smart grid WSNs. In this paper, the applications of sensor networks in electric power systems are discussed and analyzed first. Then, the characteristics of smart grid WSNs are summarized. Threats and security requirements special for wireless sensor networks used in smart grid systems are presented. Based on these works, reference security architecture was proposed to guide the development and the design of the security solutions of wireless sensor networks in smart grid systems, considering the information security requirements of electric power systems. Moreover, open security issues needed solve to protect WSNs applied in smart grid, and research challenges are introduced.