Vic lists demands for energy guarantee

Josh Frydenberg has rejected Victoria's proposed changes to the federal energy policy

Victoria wants the federal government to stare down the "climate crazies" in its ranks and commit to increasing, not decreasing, future emission reduction targets.

The state Labor government on Wednesday made the demand as part of a list of conditions it wants met before it considers signing up to the coalition's energy policy.

But Federal Environment Minister Josh Frydenberg said the state risks blackouts and higher energy prices by failing to support the national energy guarantee which aims to cut power costs for households by up to $550 a year.

It also includes targets to cut greenhouse gas emissions, to the ire of some federal MPs who believe it downplays the importance of coal in the energy mix.

The Labor governments of Victoria and Queensland have also challenged the policy, saying it doesn't go far enough and questioning how well it's supported by the coalition party room.

"We can still get this right, but only if Malcolm Turnbull stares down the climate-crazies in his party and puts a workable scheme on the table that doesn't hurt local jobs and households," Victorian Energy Minister Lily D'Ambrosio said on Wednesday.

Victoria wants emissions reduction targets set every 36 months, at least three years in advance, that "never go backwards" and are set by regulation rather than legislation, as the federal government is trying to do.

"It's got to be flexible and not tie the hands of future federal governments that want to potentially have greater ambition in terms of reducing emissions," Ms D'Ambrosio said.

But Mr Frydenberg was quick to reject some of Victoria's "11th-hour" demands.

"We are certainly not going down the path of regulation," he told reporters in Melbourne.

He added the state's energy supply was under threat if Victoria failed to sign on to the scheme.

"They will be risking blackouts here in Victoria and guaranteeing Victorians higher power prices, costing Victorians jobs and investment."

Among the Labor government's other requests, are a registry - accessible by regulators and governments - to ensure the NEG works "in the best interests of consumers".

Victoria has set its own emissions reduction target of 25 per cent by 2020 and 40 per cent by 2025.

Australia's current reduction target is 26-28 per cent on 2005 levels by 2030.

Greenpeace congratulated Victoria on its demands but said they overlook the federal plan's "fundamental flaw" of low targets.

"The NEG as it is, simply won't cut coal pollution, and it won't cut power prices," spokesman Alix Foster Vander Elst said.

"Victoria should not support a scheme that so dramatically lowballs its own sensible state renewable energy target."

Environment Victoria called on Canberra to consider state Labor's "compromise proposals", noting that the proposed federal "pollution reduction target is a disaster for renewables investment".

State and territory energy ministers will gather in Canberra on Friday to consider the energy plan.