Smart Grids (SGs) have many advantages over traditional power grids as they enhance the way electricity is generated, distributed, and consumed by adopting advanced sensing, communication, and control functionalities that depend on power consumption profiles of consumers. Clustering algorithms ( e.g. , centralized clustering) are used for profiling individuals’ power consumption. Due to the distributed nature and ever growing size of SGs, it is predicted that massive amounts of data will be created. However, conventional clustering algorithms are neither efficient enough nor scalable enough to deal with such amount of data. In addition, the cost for transferring and analyzing large amounts of data is high both computationally and communicationally. This paper thus proposes a power consumption profiling model based on two levels of clustering. At the first level, local power consumption profiles are derived, which are then used by the second level in order to create a global power consumption profile. The followed approach reduces the communication and computation complexity of the proposed two level model and improves the privacy of consumers. We point out that having a good knowledge of the local power profiles leads to more effective prediction model and cost-effective power pricing scheme, especially in a heterogeneous grid topology. In addition, the correlations between the local and global profiles can be used to localize/identify power consumption outliers. Simulation results illustrate that the proposed model is effective in reducing the computational complexity without much affecting its accuracy. The reduction in computational complexity is about 52% and the reduction in the communicational complexity is about 95% when compared with the centralized clustering approach.