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The smart grid provides a platform for thirdparty service providers to remotely monitor and manage energy usage for consumers. At the same time, the involvement of service providers brings a new set of security threats to the smart grid. In this article, we first identify the cyber security challenges on service provision in the smart grid. Then we present two main security issues related to service provision and provide potential solutions. The first one is to establish a secure communication procedure among the electric utility, consumers, and service providers. The second one is to provide a privacy-preserving yet accountable authentication framework among the smart grid entities without relying on any trusted third party. Finally, we suggest directions of future work on secure service provision by describing several open issues.