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In this paper, multiuser selection scheme is employed in dynamic home area networks (HANs) for smart grid communications, to reduce the effects of fading at the receiver part of smart meter. The performance of multiuser selection scheme is evaluated in two cases: in the absence of interference and in the presence of multiuser interference (MUI). In the former case, the closed-form capacity outage probability as well as the numerical values of the bit error rate (BER) are obtained via the probability density function (PDF) of signal to noise ratio (SNR) that is derived from the amplitude distribution property of the classic indoor Saleh-Valenzuela (S-V) channel. In the latter case, the multiuser interference cancellation coefficient as a random variable is added for the calculation of signal to interference noise ratio (SINR). In addition, due to free space path loss and log-normal shadowing, the sum of MUI is treated as another log-normal-distributed random variable by exploiting central limit theorem. Numerical results show that the performance of multiuser selection scheme in HANs of smart grid is due to several factors, i.e., total number of devices in HANs, traffic intensity, modulation scheme, and multiuser interference cancellation coefficient, etc.