The incident began with the break of a six-inch water main around 10 p.m. Monday on Kinderkamack Road in River Edge.
That ruptured the power transmission line between the New Milford substation and the River Edge substation.
The line is culled by diolexic mineral oil, which mixed with the water and gushed onto the street.
"The oil was in the line, at 230,000 volts, obviously causes some resistance in the line, and they have to cool it," River Edge Fire Chief John Mauthe said. "We've identified the discharge points in the brooks, and we've put some booming and dyking operations there as well."
Firefighters were using sand to clean up blocks of the product from Kinderkamack Road and the surrounding area, as well as to prevent the sludge from spreading. At least three storm drains were also affected.
Once the surface is cleaned up, workers will have to open up the street to determine what kind of of work is necessary to fix the situation.
Power remains on in the area, and no homes were evacuated.