Emergency services went to Greenmarket in Dundee just before 8.30am on Thursday after a caller reported a loud noise and smoke coming from a drain.
The Scottish Fire and Rescue Service said it found a small fire in a sub-surface cable pit, which it put out using a CO2 extinguisher.
Police confirmed the cause had been an electrical fault, which has affected neighbouring properties.
Some of the nearby buildings were evacuated while the incident was dealt with.
Officers advised people to avoid the area while energy supplier SSE handles the incident.
A police spokesman said: “SSE are currently dealing with this, however there may be considerable disruption in the area for some time while the problem is investigated and dealt with.
“Please try and stay away from the area if you can. Thank-you for your patience.”