It has been well known for decades that geomagnetic storms causes changes in the terrestrial ground current. The most dramatic examples of this effect are in the many reports of telegraph system failures during the 1800s. So long as a system requires an 'earth ground', its circuit is vulnerable to the intrusion of geomagnetically-induced currents (GICs). For the electric power grid, these DC currents do not need to exceed much above 100 amperes in order to do damage (Odenwald,1999, Kappenmann, 2010 ).
When GICs enter a transformer, the added DC current causes the relationship between the AC voltage and current to change. It only takes a hundred amperes of GIC current or less to cause a transformer to overload during one-half of its 60-cycle operation. As the transformer switches 120 times a second between being saturated and unsaturated, the normal hum of a transformer becomes a raucous, crackling whine physicists call magnetostriction. Magnetostriction generates hot spots inside the transformer where temperatures can increase very rapidly to hundreds of degrees in only a few minutes, and last for many hours at a time. During the March 1989 storm, a transformer at a nuclear plant in New Jersey was damaged beyond repair as its insulation gave way after years of cumulative GIC damage. During the 1972 storm, Allegheny Power detected transformer temperature of more than 340 F (171 C). Other transformers have reached temperatures as high as 750 F (400 C). Insulation damage is a cumulative process over the course of many GICs, and it is easy to see how cumulative solar storm and geomagnetic effects were overlooked in the past.
Outright transformer failures are much more frequent in geographic regions where GICs are common. The Northeastern US with the highest rate of detected geomagnetic activity led the pack with 60% more failures. Not only that, but the average working lifetimes of transformers is also shorter in regions with greater geomagnetic storm activity. The rise and fall of these transformer failures even follows a solar activity pattern of roughly 11 years.
Reference : Sten Odenwald, "Space Weather – Impacts, Mitigation and Forecasting", pp21-25, National Institute for Aerospace, pp45. 2009.