In a statement, a spokesperson for Transpower NZ said the outage was caused by an electrical equipment fault.
"The outage was caused by an electrical equipment fault which occurred on one of the feeders that supply Unison, the local lines company," the spokesperson said.
"Our priority is restoring power supply to the wider Taupō region as soon, and as safely, as possible.
"We estimate it will take some time for Unison to restore power to individuals and businesses in affected areas."
Since the power was restored by Transpower NZ, Unison has started work progressively restoring power to homes and businesses throughout the region.
"This is sooner than expected, although will take up to two hours to have everyone's power back on," Unison said on Facebook.