Abstarct: In smart networks, the problem of measuring and estimating the state of the system is vital. Power system monitoring is unavoidable for optimal operation and preventing the probable failures. Phasor measurement units (PMUs) is one of the most important parts of the wide area measurement system (WAMS). Also, optimal PMU placement (OPP) problem is one of the significant issues in the WAMS. Communication infrastructure, as an inseparable part of the wide area measurement system (WAMS), has to be optimally designed and placed to collect information from phasor measurement units (PMUs) and deliver them to control centers. Therefore, the power system observability cannot be obtained by employing only PMUs. In fact, in order to well estimate the state of the system, observability is a must. In this thesis, a security-baxsed observability (SBO) and economic-baxsed observability (EBO) methods for the PMU and related communication infrastructure is proposed. A hybrid wireless sensor including plug-in powered sensor nodes (PPSNs) and energy harvesting sensor nodes (EHSNs) is proposed for connecting of PMUs throughout the system to enable a convenient and low cost communication media. The contingency-constraint optimal PMU placement and related sensor-baxsed communication infrastructure are proposed and formulated. To increase the reliability of the CI, a reliability index for the wireless sensors is added as a constraint to the objective function. The objective function includes the total cost minimization subject to power system observability and communication constraints. The proposed method is evaluated on sample test systems to assess the applicability and effectiveness of the proposed algorithm compared to the conventional methods in this subject area. The results show the advantages of the method and reduction of WAMS total cost compare to the previous methods.