The objective of this research is to establish a foundational framework for smart grids that enables significant penetration of renewable DERs and facilitates flexible deployments of plug-and-play applications, similar to the way users connect to the Internet. The approach is to view the overall grid management as an adaptive optimizer to iteratively solve a system-wide optimization problem, where networked sensing, control and verification carry out distributed computation tasks to achieve reliability at all levels, particularly component-level, system-level, and application level. Intellectual merit. Under the common theme of reliability guarantees, distributed monitoring and inference algorithms will be developed to perform fault diagnosis and operate resiliently against all hazards. To attain high reliability, a trustworthy middleware will be used to shield the grid system design from the complexities of the underlying software world while providing services to grid applications through message passing and transactions. Further, selective load/generation control using Automatic Generation Control, based on multi-scale state estimation for energy supply and demand, will be carried out to guarantee that the load and generation in the system remain balanced. Broader impact. The envisioned architecture of the smart grid is an outstanding example of the CPS technology. Built on this critical application study, this collaborative effort will pursue a CPS architecture that enables embedding intelligent computation, communication and control mechanisms into physical systems with active and reconfigurable components. Close collaborations between this team and major EMS and SCADA vendors will pave the path for technology transfer via proof-of-concept demonstrations.