The outage was reported shortly after 1 p.m. and originally affected 9,950 customers in Oakland's Fruitvale District and in East Oakland, PG&E spokesman Joe Molica said.
As of 2:30 p.m., crews had restored service to about 8,000 customers, Molica said, leaving about 1,900 without power.
"We should see that number continue to come down," he said. It is unknown how many mylar balloons drifted into the power lines, but it only takes a single such balloon to cause an outage. The metal surface of mylar balloons can cause significant damage and potentially create hazardous situations, according to Molica.
In this case, the balloon or balloons caused a voltage surge that brought down four spans of wire.
"This just shows the extreme importance of not letting mylar balloons go anywhere near overhead power lines," he said.
PG&E urges people who do purchase mylar balloons to ensure that they are secured with weights so that they do not float away.
Molica said that the agency sees significant increases in balloon-related outages twice a year: around Valentine's Day and around graduations between mid-May and June.
People who encounter downed power lines should call 911 immediately and keep themselves and others away from the live wires.