In future, the smart grid power transmission could be the most usable system for power transmission, however it also introduces many security problems. To overcome the security problem, the authors have used an encryption scheme which is introduced by an information network in the communication medium. In this paper, the information network can be integrated into the smart grid power transmission. In between the two systems of communication, the previous packets can be taken as re-transmission sequences. Here the re-transmitted packet is marked as “1” and the non retransmitted packet can be marked as “0”. At the time of communication, the re-transmission sequences can be generated at both sides to update the encryption key. In this paper, the smart grid is built by using ZigBee protocol for wireless communication of the information network. The encryption system is designed based on this platform. The result shows that the re-transmission and packet loss can be very low and it is impossible for the attacker to track the updation of the encryption key.