The work in this paper presents recent advances in developing a theory of information flow security specifically geared towards preserving the event confidentiality in Cyber-Physical Systems (CPSs). Preserving the confidentiality of sensitive internal actions is a unique challenge in CPSs due to the inherent external observability of such systems and the tight coupling between their cyber and physical domains. The far-reaching objective of this work is to develop a science of self-obfuscating systems based on the composition of simple building blocks. A model of Nondeducibility composes the building blocks under information flow security properties. To this end, this work presents fundamental theories on external observability for basic regular networks and the concept of “event compensation”. Further, this work extends previous work by providing simulation based proof of these concepts for an experimental power transmission bus network as a model CPS.