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There is a worldwide trend to modernize old power grid infrastructures to form future smart grids, which will achieve efficient, flexible energy consumption by using the latest technologies in communication, computing, and control. Smart grid initiatives are moving power systems curricula toward smart grids. Although the components of smart grids fall within the broader discipline of electrical and computer engineering, undergraduate students are rarely assigned single design projects that require classic power systems knowledge combined with communication, computing, and control. Therefore, as a significant step toward potential curriculum changes, this paper presents such a project, a smart home test bed based on the pedagogical model of project-based learning (PBL) for undergraduate education. The proposed test bed allows undergraduates to gain key knowledge in smart grid topics, such as flattening demand peaks, real-time price response, wireless sensor networks, machine learning, pattern recognition, embedded system programming, user interface design, circuit design, and databases. This is well aligned with smart grid initiatives and provides a platform for students to develop their creativity in engineering design. It also offers real-life examples to be used for raising general public awareness of energy conservation.