To secure the network communication for the smart grid, it is important that a secure key management scheme is needed. The focus of this paper is on the secure key distribution for the smart grid. In this paper, we first overview the key management scheme recently proposed by Wu-Zhou and show it is vulnerable to the man-in-the-middle attack. Then we propose a new key distribution protocol and demonstrate it is secure and efficient for smart grid network. Applying traditional PKI to the smart grid requires significant work and maintenance of the public key. By using Kerberos to smart grid may lose authentication from the third party due to power outages. Therefore, we propose a scheme for a smart grid using a trusted third party which not only has no issue on key revocation, but also the third party can be easily duplicated in case power outages occur.