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This paper proposes a novel load management solution for coordinating the charging of multiple plug-in electric vehicles (PEVs) in a smart grid system. Utilities are becoming concerned about the potential stresses, performance degradations and overloads that may occur in distribution systems with multiple domestic PEV charging activities. Uncontrolled and random PEV charging can cause increased power losses, overloads and voltage fluctuations, which are all detrimental to the reliability and security of newly developing smart grids. Therefore, a real-time smart load management (RT-SLM) control strategy is proposed and developed for the coordination of PEV charging based on real-time (e.g., every 5 min) minimization of total cost of generating the energy plus the associated grid energy losses. The approach reduces generation cost by incorporating time-varying market energy prices and PEV owner preferred charging time zones based on priority selection. The RT-SLM algorithm appropriately considers random plug-in of PEVs and utilizes the maximum sensitivities selection (MSS) optimization. This approach enables PEVs to begin charging as soon as possible considering priority-charging time zones while complying with network operation criteria (such as losses, generation limits, and voltage profile). Simulation results are presented to demonstrate the performance of SLM for the modified IEEE 23 kV distribution system connected to several low voltage residential networks populated with PEVs.