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Smart grid is widely considered to be the next generation of power grid, where power generation, management, transmission, distribution, and utilization are fully upgraded to improve agility, reliability, efficiency, security, economy, and environmental friendliness. Demand response management (DRM) is recognized as a control unit of the smart grid, with the attempt to balance the real-time load as well as to shift the peak-hour load. Communications are critical to the accuracy and optimality of DRM, and hence at the core of the control performance of the smart grid. In this paper, we introduce cognitive radio into the smart grid to improve the communication quality. By means of spectrum sensing and channel switching, smart meters can decide to transmit data on either an original unlicensed channel or an additional licensed channel, so as to reduce the communication outage. Considering the energy cost taxed by …