In the most recent years, efforts have been made to make electrical networks smart. One of the necessary steps in this direction, is fully monitoring the electrical network. This challenging task can be achieved thanks to phasor measurement units (PMU), devices used for a state estimation of this network. We consider the PMU placement problem and propose to model it as a bilevel programming problem, which takes into account a propagation rule based on Ohm’s and Kirchoff’s law. The bilevel program can be obtained by using a fixed point argument. We present two methods to solve such a problem and show computational results comparing them against a more “natural” mixed integer programming formulation, solved with a commercial solver.