911 and the local electrical company have been contacted. A storm came through, we lost power, it came back but fluctuates. We then noticed that the local transformer was on fire. I was alarmed at the sound and concept but my husband wasn’t that phased. How common is this and how much should I worry? We are not in a fire prone area.

Happens all the time.
Engineers have planned for this sort of thing and firemen have trained for it, given they’ve been around since the start of electrification over 100 years ago.
There are millions of transformers in one state alone. They’re part-and-parcel of the power grid.
And most likely it’s one without PCB’s, as only GE and Westinghouse ever used PCB’s, and even they stopped using PCB’s in 1979 (by regulation).
Thanks. It’s been reassuring to hear these types of comments. They put it out overnight and now we’re waiting on them to fix the transformer. Sucks to lose the AC during a heat wave but glad that they were responsive.