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The power grid is a federated system. Regions of the system are controlled by different organizations and security of the grid is imposed from above through regulation of the security techniques used by the federants. This approach will be less effective as we move to a smart grid, where control of some elements of the grid rests in the customer's home through technologies that enable remote access to appliances. These regions of the smart grid are less trusted, yet they interact in various ways with other parts of the grid. This paper demonstrates threat propagation in the smart grid from such regions, and discusses architectural approaches to mediating the impact of such flows.