On smart grid communications reliability In this paper, we discuss the communications reliability requirements posed by the smart power gridwith a focus on communications in support of wide area situational awareness. Implementation of wide area situational awareness relies on both transmission substation networks and wide area optical networks. We study the reliability of a sample communications network of the California Power Grid and find that its reliability falls short of proposed requirements. To overcome this issue, we consider the problem of designing the network to meet the reliability requirements while minimizing the network cost. Therefore, we propose two greedy iterative heuristics and a heuristic integer linear programming (H-ILP) model using minimum cut-sets for network reliability optimization. The greedy iterative algorithms outperform the H-ILP approach in terms of cost, but require a larger amount of computing resources. Both proposed models are in fact complementary and thus provide a framework to optimize the reliability of smart grid communications networks.