Victorian power companies should be fined up to $20,000 if they do not try to help customers struggling to pay their bills, while some consumers should have to pay before they use it, the industry regulator has recommended.

The Essential Services Commission made a range of recommendations as part of an inquiry into the soaring rates of electricity disconnections in the state and financial hardship programs available to customers.

It suggested struggling customers be placed on a payment plan.

If their debt continued to grow after three months, the customer should be placed on a pre-payment plan and have their debts deferred for up to two years, the commission said.

The report also said companies should work intensively with customers to help them bring their energy usage into line with what they could afford.

The recommendations are expected to be adopted by July next year.

Emma King from the Victorian Council of Social Service (VCOSS) said she was concerned about the pre-payment proposal.

"It just doesn't seem to make sense," she said.

"If someone has no money so they're unable to pay their bill, to expect them to pay up front for their energy consumption in a way that no one else has to do, to be forced into that circumstance, VCOSS is totally opposed to that."

Pre-payment only 'a last resort' for retailers: Energy Minister

Energy Minister Lily D'Ambrosio said the pre-payment method would only be a last resort.

"The pay as you go recommendation is simply available and only available as an alternative to disconnection," she said.

Ms King said she backed the idea of slapping fines on retailers.

"There are some energy companies that in the past have taken a very cavalier approach to supporting customers who are in financial difficulty," she said.

"We've seen skyrocketing disconnections. The penalties of up to $20,000 - unfortunately it's a necessary thing because nothing else has worked to date."

A report released by the Brotherhood of St Laurence last year found electricity prices had tripled in six years.