Communications networks play a vital role in transmission and distribution grid operations. But this role is evolving as power utilities begin to migrate legacy services and embrace smart grid applications. To succeed in the future, utilities will need reliable, secure, and cost-effective communications solutions that give them greater control over grid operations and automation. This paper examines key challenges that are driving power utilities to modernize the communications infrastructure that supports their grids. It explains how utility communications requirements are changing and why utilities should re-examine the cost of their existing solutions compared to modern solutions and determine which best addresses their current and future needs.