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The dynamic non-linear state-space model of a power-system consisting of synchronous generators, buses, and static loads has been linearized and a linear measurement function has been considered. A distributed dynamic framework for estimating the state vector of the power system has been designed here. This framework employs a type of distributed Kalman filter (DKF) known as a Kalman consensus filter (KCF) which is located at distributed control centers (DCCs) that fuse locally available noise ridden measurements, state vector estimates of neighboring control centers, and a prediction obtained by the linearized model to obtain a filtered state vector estimate. Further, the local residual at each control center is checked by a median chi-squared detector designed here for bad data/Gaussian attack detection. Simulation results show the working of the KCF for an 8 bus 5 generator system, and the efficacy of the median chi-squared detector in detecting the DCC affected by Gaussian attacks.