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Internet-of-things (IoT) introduce new attack surfaces for power grids with the usage of Wi-Fi enabled high wattage appliances. Adversaries can use IoT networks as a foothold to significantly change load demands and cause physical disruptions in power systems. This new IoT-based attack makes current security mechanisms, focusing on either power systems or IoT clouds, ineffective. To defend the attack, we propose to use a data-centric edge computing infrastructure to host defense mechanisms in IoT clouds by integrating physical states in decentralized regions of a power grid. By enforcing security policies on IoT devices, we can significantly limit the range of malicious activities, reducing the impact of IoT-based attacks. To fully understand the impact of data-centric edge computing on IoT clouds and power systems, we developed a cyber-physical testbed simulating six different power grids. Our preliminary results show that performance overhead is negligible, with less than 5% on average.