Electric power interruption has become a serious challenge in Ethiopia. In this aspect, the community, micro and small enterprises, commercial and service institutions have been affected and are in loss of their businesses. There are controversial assumptions regarding the problem: As argued by some, the electric power interruption problem was demand related with the rapid growth of the country, whereas, others admit the failure of aged distribution and transmission lines as well as power transformers have contributed to the problem. This study, therefore, aims to investigate failures of power transformers in particular as one of the factors contributing for the overall electric power interruption and fluctuation in the country. The study employed Failure Modes and Effects Analysis (FMEA) with Analytical Hierarchy Process (AHP) to analyze prominent failures in 1322 Oil Natural, Air Natural (ONAN) distribution transformers over five years. The result of the study generally indicated that the major causes of failure of distribution ONAN transformers as lack of protective devices, inappropriate testing and diagnosis and inefficient operation and maintenance.