Residents have been evacuated and a major incident has been declared following "multiple explosions underground".
Western Power Distribution said there had been a "cable fault" in Church Street in the market town of Kingsbridge, Devon.
The street has been closed while firefighters and engineers from both gas and electric companies attend.
One man has been taken to hospital, police said.
Police said residents reported "multiple explosions underground" at about 11:50 GMT.
They said they were "unaware" of any serious injuries.
An emergency reception centre has been set up to temporarily house about 25 residents evacuated from their homes.
The public are being asked to avoid the area, police said.
Western Power Distribution said engineers were carrying out repairs after about 100 customers were affected by the cable fault.
Wales & West Utilities said "no evidence of a gas leak" had been found at any of the affected properties, and the issue was "not related to the gas network".
Local resident Jim Bishop, 49, said he had noticed a "burnt smell" to the air before emergency services were called.
"We decided to tell people to get in the houses and close their doors, and started to help to block the roads off and divert some traffic while we waited for the police to arrive," he said.
Victor Price, who lives on Church Street, was told to evacuate his home when returning from work at midday.
He said there had been subsequent "tremors" in the street, but emergency services appeared to have things "under control".
Devon and Cornwall Police said they hoped residents would be able to return to their homes this evening.