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The power industry is in the early stages of a fundamental change, driving the integration of energy, communications, and information technologies into one intelligent utility network, known as the smart grid. This work investigates data traffic management in smart grid networks, in which huge volumes of data produced by advanced meters cannot be fully delivered to utility data centers due to limited bandwidth. To develop a solution for optimizing traffic flow, we exploit a particular characteristic of this network - power-related applications can benefit from different levels of data quality along the path to the final destination. We thus handle congestion by performing intelligent quality-aware volume reduction of the flows within the network. Our optimization problem is that of computing for each flow the amount of volume reductions in different locations, so as to maximize overall revenue. This work initiates a rigorous treatment of traffic management in the smart grid.