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The current centrally controlled power grid is undergoing a drastic change in order to deal with increasingly diversified challenges, including environment and infrastructure. The next-generation power grid, known as the smart grid, will be realized with proactive usage of state-of-the-art technologies in the areas of sensing, communications, control, computing, and information technology. In a smart power grid, an efficient and reliable communication architecture plays a crucial role in improving efficiency, sustainability, and stability. In this article, we first identify the fundamental challenges in the data communications for the smart grid and introduce the ongoing standardization effort in the industry. Then we present an unprecedented cognitive radio based communications architecture for the smart grid, which is mainly motivated by the explosive data volume, diverse data traffic, and need for QoS support. The proposed architecture is decomposed into three subareas: cognitive home area network, cognitive neighborhood area network, and cognitive wide area network, depending on the service ranges and potential applications. Finally, we focus on dynamic spectrum access and sharing in each subarea. We also identify a very unique challenge in the smart grid, the necessity of joint resource management in the decomposed NAN and WAN geographic subareas in order to achieve network scale performance optimization. Illustrative results indicate that the joint NAN/WAN design is able to intelligently allocate spectra to support the communication requirements in the smart grid.