We consider line outages in the transmission network of the power grid, and specifically those caused by natural disasters or large-scale physical attacks. In such networks, an outage of a line may lead to overload on other lines, thereby leading to their outage. Such a cascade may have devastating effects not only on the power grid but also on the interconnected communication networks. We study a model of such failures and show that it differs from other models used to analyze cascades (e.g., epidemic/percolation-based models). Inspired by methods developed for network-survivability analysis, we show how to identify the most vulnerable locations in the network. We also perform extensive numerical experiments with real grid data to estimate the effects of geographically correlated outages and briefly discuss mitigation methods. The developed techniques can indicate potential locations for grid monitoring, and hence, will have impact on the deployment of the smart-grid networking infrastructure.