Coronal Mass Ejections Can Cause Grid Failure
A coronal mass ejection (CME) is an ejection of material from the solar corona. They occur when a large bubble of plasma escapes the sun's gravitational field and travels through space to the earth at high speeds over the course of several hours.  The ejected plasma consists primarily of electrons and protons.

Plasma is essentially electrically charged (ionized) gas, consisting of free-moving electrons and ions (atoms that have lost electrons). On earth, we are familiar with the ordinary states of matter: solids, liquids and gases. But in the universe at large, plasma is by far the most common form. Plasma in the stars and the space between them makes up 99 percent of the visible universe.

The corona is the outermost layer of the Sun's atmosphere. It extends millions of kilometers into space, most easily seen during a total solar eclipse, but also observable in a coronagraph. Coronal Mass Ejections were once thought to be the result of solar flares, but while they sometimes accompany solar flares, there is no direct relation between the two.

Solar Storms
Coronal Mass Ejections are often called "solar storms" or "space storms" in the popular media. Coronal mass ejections cause shock waves in the thin plasma of the heliosphere, launching electromagnetic waves and accelerating particles (mostly protons and electrons) to form showers of ionizing radiation that precede the CME. When a CME impacts the Earth's magnetosphere, it temporarily deforms the Earth's magnetic field, changing the direction of compass needles and inducing large electrical ground currents in Earth itself; this is called a geomagnetic storm and it is a global phenomenon.

Coronal Mass Ejections impacts can induce magnetic reconnection in Earth's magnetotail (the midnight side of the magnetosphere); this launches protons and electrons downward toward Earth's atmosphere, where they form the aurora.

Magnetic Storms
A geomagnetic storm is a temporary disturbance of the Earth's magnetosphere caused by solar coronal mass ejections, coronal holes or solar flares.
A geomagnetic storm is caused by a solar wind shock wave which typically strikes the Earth's magnetic field 24 to 36 hours after the event. This only happens if the shock wave travels in a direction toward Earth.
The solar wind pressure on the magnetosphere will increase or decrease depending on the Sun's activity. These solar wind pressure changes modify the electric currents in the ionosphere. Magnetic storms usually last 24 to 48 hours, but some may last for many days.

Recorded Problems
From August 28 until September 2, 1859, numerous sunspots and solar flares were observed on the sun, the largest flare occurring on September 1st. A massive coronal mass ejection headed directly  at Earth due to the solar flare and made it within eighteen hours — a trip that normally takes three to four days.

On September 1 – 2, the largest recorded geomagnetic storm occurred, as recorded by the Colaba observatory near Bombay, India. There are records in Boston that the light was so bright that even at 1:00 AM it was possible to read a newspaper without any other source of light.

The combination of the Solar Flare and Coronal Mass Ejection caused a geomagnetic storm that created strong enough currents in certain long Telegraph (then about 15 years old) wires in both the United States and Europe experienced induced electromagnetic force, in some cases even shocking telegraph operators and causing fires.

COMMENT: Reportedly telegraph wires became so hot due to CME-induced current; they melted, fell to the ground and started fires.

Auroras were seen as far south as Hawaii, Mexico, Cuba, and Italy - phenomena usually only seen near the poles. This was the 1859 solar superstorm.

On March 13, 1989 a severe geomagnetic storm caused the collapse of the Hydro-Québec power grid in a matter of seconds as equipment protection relays tripped in a cascading sequence of events. Six million people were left without power for nine hours, with significant economic loss. The storm even caused auroras as far south as Texas. The geomagnetic storm causing this event was itself the result of a coronal mass ejection, ejected from the Sun on March 9, 1989.

COMMENT: Hydro-Quebec’s power grid is the largest on the North American continent.  When they retrofitted to fix things after the storm, it only cost $34 per person for the one-time endeavor.

In August 1989, another storm affected microchips, leading to a halt of all trading on Toronto's stock market.

On February 26, 2008 the magnetic fields erupted inside the magnetotail, releasing about 1015 Joules of energy. The blast launched two gigantic clouds of protons and electrons, one toward Earth and one away from Earth. The Earth-directed cloud crashed into the planet below, sparking vivid auroras in Canada and Alaska.

Electric grid
When magnetic fields move about in the vicinity of a conductor such as a wire, a geomagnetically induced current is produced in the conductor. This happens on a grand scale during geomagnetic storms (the same mechanism also influences telephone / telegraph lines and piping (think the Alaskan pipeline)) on all long transmission lines. Fiber optic lines and underground cables are not affected.

Power companies, which operate long transmission lines (many kilometers in length), are thus subject to damage by this effect. Notably, this chiefly includes operators in China, North America, and Australia; the European grid consists mainly of shorter transmission cables, which are less vulnerable to damage.

The (nearly direct) currents induced in these lines from geomagnetic storms are harmful to electrical transmission equipment, especially generators and transformers — since they induce core saturation, constraining their performance (as well as tripping various safety devices), and causes coils and cores to heat up. This heat can disable or destroy them, even inducing a chain reaction that can blow transformers throughout a system

This is precisely what happened on March 13, 1989: in Québec, as well as across parts of the northeastern U.S., the electrical supply was cut off to over 6 million people for 9 hours due to a huge geomagnetic storm. Some areas of Sweden were similarly affected.

According to a study by MetaTech Corp., if a storm with a strength comparative to that of 1859 were to strike today, up to 350 transformers would be broken and 130 million people would be left without power in the US. It could take decades to recover.

COMMENT: A transformer ordered today will take about two years for delivery.  Large transformers are only manufactured in the Far East; there is no domestic production.  Since a CME is a worldwide event, transformer manufacturers would lose power and be unable to manufacture them for a long time.  When they recover, they will take of their own country first and their friends next.  America would just have to wait until manufacturers chose to help them.  And we would need in excess of 350 such transformers for our country.