Hakuna Matata cafe was less than 50m away from the power switch. Co-owner Honza Vesely said he heard a "huge bang" about 9am, before seeing smoke outside.
"I just looked and there was like, big smoke coming out of it," Vesely said.
"There was a huge bang, it shook the floor ... a lady next door, she actually saw flames."
He said "within minutes" there were Marlborough Lines staff at the scene.
"The last time it happened, I think it was in the winter a couple of years ago," he said.
"But last time, same thing, us, Briscoes, like everybody, was without power."
Stuff understands police officers in the station across the street also heard the bang. Several immediately ran over to clear members of the public from the scene and guard the unit, in the centre of a car park on Main St.
Marlborough Lines field services general manager Dan Quinn was at the scene a few minutes later, and said a "unit failure" caused the power cut, "so we're just assessing".
Cotton On Blenheim backed onto the Main St car park. Manager Shaiann Geale said she also heard the "big bang". She was worried the power cut would affect their ability to trade if it lasted very long.
"If it's out all day, that's a whole day to trade," she said.
Marlborough Lines operations general manager Warner Nichol said 450 customers in the Blenheim CBD were switched off on Tuesday due to the "fault in a high voltage oil switch".
He said all but 30 of those had their power restored within half an hour, and he expected all but three customers to have their power switched on before noon.
"There'll be three (customers) off while we work out what we're going to do exactly with this fault," he said.
The three that would remain without power included Briscoes Blenheim and Rebel Sport Blenheim on Main St. Nichol said it was "still early days" to say when they would be switched back on.
"We're still working out how we're going to manage that," he said.
The fault was part of Marlborough Lines' high voltage distribution system in the CBD, which included a series of switches that connected to transformers, he said.
"And when we get a fault like this, we can operate other switches and isolate the fault exception," he said.
"It could just be an internal failure, but we don't know whether it's going to require a full replacement or whether we're going to be able to repair it, we're not sure just yet."
- This story was first published by Stuff.