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Smart grid technology is one of the recent developments in the area of electric power systems that aid the use of non-conventional sources of energy in parallel with the conventional sources of energy. Monitoring and control of smart grids is essential for its efficient and effective functioning. In this paper, we propose an architecture for monitoring power in smart grid applications using wireless sensor network (WSN) technology. A prototype power sensing module is designed and developed to calculate the power for any kind of loads. Using WSN technology, the monitored power is communicated to the sink at periodic intervals. Multi hop wireless mesh network is set up using IRIS motes to enhance the communication between the power sensing nodes and the sink. The data collected is a rich source of repository for data analysis and modelling. A number of smart actions and applications, such as power theft detection, energy efficient building design, smart automation systems and smart metering can evolve out of the proposed model. A novel Power theft detection algorithm is proposed and simulated in this paper. The system is also scaled using GSM technology to extend the range of communication. Load monitoring can aid distributed architecture in smart grids with automated technology to switch between the non-conventional source of energy and the grid.