Several multiparty systems supporting group-based and cloud-based applications have been proposed in the context of smart grid. An important requirement of these systems is that the devices/parties need to communicate with each other as members of a group. In this paper, we present an efficient group key (GK) management scheme aimed at securing the group communications, for instance, from the utility to appliances and smart meters located in different homes. Our scheme is based on the X.1035 password-authenticated key exchange protocol standard and also follows the cluster-based approach to reduce the costs of the GK construction and maintenance for large groups. Our protocol enables secure communications utilizing any communication technology. Analysis using one of the best evaluation tools in the technical community shows that our constructed GK is valid and secure against well-known attacks. We also show that the proposed scheme supports forward and backward secrecy and is more efficient in comparison with other GK mechanisms in the literature. Copyright © 2013 John Wiley & Sons, Ltd.