Updated 9.23am: A power transformer in Auckland is on fire, leaving hundreds of homes and businesses without power.

The Fire Service is now closing Abbotts Way, Auckland Transport said.

There are already delays in both directions for morning commuters.

The Fire Service has sent five fire trucks and a specialised foam unit to the 11-kilovolt transformer in Remuera.

A spokeswoman said the fire that started about 6.30am remains well involved.

More than 2300 homes and businesses were without power at one stage, but that number's now fewer than 200.

Vector thinks the fire was started by a short caused by water damage.

The Edmund Hillary Retirement Village, which has more than 700 residents, has confirmed it has no power.

Ryman Healthcare spokesman David King said the Sir Edmund Hillary village put in generators after a previous big cut.

But they don't cover everyone.

"They cover all the essential services to keep everyone warm and lifts working and things like that. Residents who live independently in townhouses come to the village for a couple of tea so we can look after them as well."

Traffic signals are also out on Lunn Avenue and Abbotts Way - and the Fire Service said officials are looking at closing the road.