The blue flashes were caused by a power surge and an electric current passing through the air after a transformer explosion and a small fire at the Con Edison plant.
Meanwhile, the power cut hit New York's LaGuardia Airport, which warned travellers to be prepared for delays.
The New York Fire Department confirmed the incident was under control in a statement posted to Twitter roughly an hour after the explosion.
Con Edison says a couple of transformers tripped offline at the substation at 20th Avenue and 32nd Street, sparking a fire.
NYPD Chief Terence Monahan confirmed there had been an explosion and that the fire was under control.
The power supplier said it is evaluating power outages in surrounding areas and investigating the cause of the fire.
New Yorkers took to social media to share dramatic images and video and speculate about what happened.
Twitter users captured the blue glow from the explosion. And the Metropolitan Transportation Authority said in a tweet that No. 7 train had been disrupted by the power failures.
A spokesman for Mayor Bill de Blasio tweeted their had been "scattered power outages".
Astoria and Queens were brilliantly lit up by the explosion and was visible from as far as Manhattan.
'Update: Power has been restored but activity still at a stand still, ' he added.
Inbound flights were held at their point of origin during this time. Folks all the way out in Jersey City reported seeing the flashy lights. 'So bright I couldn't look directly at it'.
One video showed the light pulsating different colors at one point.
"You could hear the roar and see the super white, bright light, " Tebbett said.