Victoria wants to break away from national energy supply rules so it can make greater use of renewable power sources.
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But the organisation representing electricity and gas businesses says sticking to the rules is crucial to ensure investments are cost effective for energy customers.
The state Labor government introduced a bill to parliament on Tuesday to override the national regulations, a regime it says causes excessive delays in delivering renewable energy projects to the market.
"The existing national energy laws have let us down - they have failed to drive investment in our electricity system or provide a 21st century grid for all Victorians," Energy Minister Lily D'Ambrosio said in a statement.
Ms D'Ambrosio said Victoria will continue pressuring the federal government for changes to the national market rules, so Victorian households are not "unfairly disadvantaged" in terms of accessing more reliable, cleaner and cheaper power.
The new laws will still involve the government consulting with the Australian Energy Market operator and the state would still be able to import electricity during peak demand periods, the minister said.
The reforms would push for more renewable energy supplies and a call out to increase capacity for the Victoria-NSW interconnector.
The Victorian opposition will decide whether to support the legislation once it has scrutinised the detail, focusing particularly on what impact it will have on reliability and power prices.
But Opposition Leader Michael O'Brien is concerned it carries on a trend of the state government wanting to go it alone on energy policy.
"(Premier) Daniel Andrews thinks he can run the country's energy policy, and we've gone from having the cheapest, most reliable energy in the country five years ago, to having the most expensive, least reliable energy today," he said on Tuesday.
The Australian Energy Council said not putting all investments through the rigorous process laid out in national energy supply rules could risk "poor investment decisions" that result in higher costs for users.
"Bypassing that rigorous process is fraught," the council's chief executive officer Sarah McNamara said on Tuesday.
"Every transmission and network investment will unavoidably affect market investments, so careful and individual assessments carried out at arm's length from politics are necessary."
The body, which represents electricity and downstream natural gas businesses, said the industry had not been consulted about the bill at all.
Australian Associated Press
