We model power grids as graphs with heavy-tailed sinks, which represent demand from cities, and study cascading failures on such graphs. Our analysis links the scale-free nature of blackout sizes to the scale-free nature of city sizes, contrasting previous studies suggesting that this nature is governed by self-organized criticality. Our results are based on a new mathematical framework combining the physics of power flow with rare event analysis for heavy-tailed distributions, and are validated using various synthetic networks and the German transmission grid.