The region's Kremlin-backed leaders said the measure had little impact because they immediately resorted to power supplies from Russia.
Kiev accuses Lugansk rebel authorities of running up an electricity debt of 2.6 billion hryvnias (USD 97.6 million).
"This past night, we completely halted energy supplies to the temporarily uncontrolled portions of the Lugansk region," Ukrenergo state power distribution company chief Vsevolod Kovalchuk wrote on Facebook.
Swathes of Lugansk and its larger neighbouring province of Donetsk were overrun in 2014 by what the West believes were Russian fighters and locally allied gunmen.
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Lugansk's self-proclaimed emergencies minister Sergei Ivanushkin said the power outage in the region's biggest cities lasted for less than 40 minutes because "we switched to our own resources".
Regional rebel leader Vladislav Deinego later told the Interfax news agency that energy-rich Russia immediately helped by sending electricity through existing power lines.
A dependence on Russian energy further divides the rebel east from the rest of Ukraine just a month after Kiev suspended all cargo trade with the separatist-controlled territories.
Moscow's representative to peace talks with Kiev and insurgency leaders in Belarus confirmed that Russia had begun supplying power to Ukraine's war-shattered separatist region.
"In response to the Ukrainian authorities' actions, the Russian government decided to provide electricity," Interfax quoted Boris Gryzlov as saying.
Russia denies plotting or backing the war in reprisal for what it claims were US-fomented 2013-2014 street protests that ousted Kiev's Kremlin-backed leader.
Deinego said the region had already used Russian electricity in 2014 due to a breakdown in Ukraine's power distribution networks.
The conflict has settled into low-intensity fighting that European leaders who helped draft a February 2015 peace agreement have been unable to stop.
Deinego said the power cut would be raised at new round of Minsk consultations tomorrow.
The meetings are coordinated by the Organisation for Security and Cooperation in Europe - the same watchdog whose American medic died in a Lugansk mine blast on Sunday.
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