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The collaborative and low-cost nature of wireless sensor networks (WSNs) brings significant advantages over traditional communication technologies used in today's electric power systems. Recently, WSNs have been widely recognized as a promising technology that can enhance various aspects of today's electric power systems, including generation, delivery, and utilization, making them a vital component of the next-generation electric power system, the smart grid. However, harsh and complex electric-power-system environments pose great challenges in the reliability of WSN communications in smart-grid applications. This paper starts with an overview of the application of WSNs for electric power systems along with their opportunities and challenges and opens up future work in many unexploited research areas in diverse smart-grid applications. Then, it presents a comprehensive experimental study on the statistical characterization of the wireless channel in different electric-power-system environments, including a 500-kV substation, an industrial power control room, and an underground network transformer vault. Field tests have been performed on IEEE 802.15.4-compliant wireless sensor nodes in real-world power delivery and distribution systems to measure background noise, channel characteristics, and attenuation in the 2.4-GHz frequency band. Overall, the empirical measurements and experimental results provide valuable insights about IEEE 802.15.4-compliant sensor network platforms and guide design decisions and tradeoffs for WSN-based smart-grid applications.