Smart grids utilize computation and communication to improve the efficacy and dependability of power generation, transmission, and distribution. As such, they are among the most critical and complex cyber-physical systems. The success of smart grids in achieving their stated goals is yet to be rigorously proven. In this paper, our focus is on improvements (or lack thereof) in reliability. We discuss vulnerabilities in the smart grid and their potential impact on its reliability, both generally and for the specific example of the IEEE-14 bus system. We conclude the paper by presenting a preliminary Markov imbedded systems model for reliability of smart grids and describe how it can be evolved to capture the vulnerabilities discussed.