UPDATE (2:21 p.m.) - Firefighters were able to contain the fire by about 11:30 a.m. and were still on scene mopping up the fire at 2 p.m. on Thursday.
The fire burned a 40 by 40 ft. spot, a smaller area than officials first reported.
CAL FIRE SLO Public Information Officer Adan Orozco told KSBY the fire apparently began when a transformer exploded and started a fire in the surrounding brush.
He says power lines were down where the fire had started. PG&E de-energized the lines, which allowed firefighters to mop up the area.
(10:51 a.m.) - Firefighters are responding to a vegetation fire that broke out near Cayucos on Thursday morning.
CAL FIRE SLO crews were dispatched to the area of Montecito Rd. and Old Creek Rd. at 10:14 a.m. after a blown transformer ignited nearby vegetation.
By 10:35 a.m., the fire had grown to a quarter acre in size. Officials say the fire has the potential to grow to 50 acres.
The area is within a mile of Whale Rock Reservoir.
Fire officials say accessing the area is difficult.
This is a developing story. Check back here for updates.