WFR was called to Western Area Power Administration for a transformer fire at approx. 12:30. Upon arrival crews were met by a salvage company who were in the process of removing components from an transformer that was no longer in service. The approx. 15 foot tall transformer had white smoke coming out the top manhole covers. Salvage crews were using a torch to remove the top of the transformer when a spark ignited some oil soaked insulation inside the transformer. The insulation was smoldering and salvage crews were unable to put the fire out with extinguishers. After speaking with WAPA Safety Specialists, WAPA Environmental Specialists, Power Grid Foreman, and Salvage Foreman it was determined the only way to put the fire out was to fill the transformer with water. The salvage company closed all lower valves and WFR used approx. 4200 gallons of water to fill the transformer and stop the smoldering insulation. WAPA is arranging the removal of the contaminated water for proper disposal.