Australian consumers can expect higher power prices and more frequent power blackouts as fire seasons get longer and blazes more intense.

Key points: Rising insurance premiums for power utilities are "undoubtedly" going to be passed on to consumers

Rising insurance premiums for power utilities are "undoubtedly" going to be passed on to consumers AER regulations allow for costs for rebuilding infrastructure damaged to be recovered from customers

AER regulations allow for costs for rebuilding infrastructure damaged to be recovered from customers The energy regulator AEMO has called for an urgent upgrade of the power network to avoid future blackouts

The group representing the poles and wires industry, Energy Networks Australia (ENA), said retail power prices could increase due to constantly rising insurance costs for electricity networks.

ENA chief executive Andrew Dillon said more frequent bushfires were putting pressure on electricity infrastructure, with "unprecedented" damage to power poles, lines and substations from the recent fires.

"We don't think there's going to be an overnight increase of prices as a result of the fires of the last two months, but what we do see is as we have assets in areas where the risk of fire is higher than it was previously, that's going to create challenges in the insurance and indeed the operations front that over time are likely to put upward pressure on prices," Mr Dillon told the ABC.

"It's almost undoubted that the cost of insurance is only going to head north from here in terms of what products are available and their costs."

Mr Dillon said people living in bushfire-prone areas could see their electricity prices increase down the track, or have to go off the grid as power networks looked at other ways to deliver electricity.

"Part of this risk debate we are having around the industry is should we continue to supply those customers by traditional poles and wires approaches, or should we start to adopt new technologies — solar, batteries, back-up generation — to effectively take those customers off-grid to both tap into that cheaper supply to make power cheaper for everyone and also to reduce the fire risk from those assets," Mr Dillon said.

Extreme weather costs

The risk of power lines sparking fires is also heightened during extreme weather.

The Victorian royal commission into the 2009 Black Saturday bushfires found five of the 11 major fires were caused by "failed electricity assets" including the Kilmore East blaze where 119 people died.

Power firm AusNet Services paid out hundreds of millions of dollars to victims of those fires.

Electricity prices are a big political issue and network cost increases need to be approved by the Australian Energy Regulator (AER), usually every five years.

AER chair Clare Savage said if businesses needed to rebuild infrastructure in the middle of a regulatory period they could apply for a "pass through" which allowed them to recover more from their customers than was agreed at the start.

"However, given the fire crisis is ongoing and the AER has yet to receive any applications for pass through funding from businesses, it is too early to say whether there will be increases in network costs in affected areas, let alone what those costs might be," she said.

"The AER's view is that consumers should pay no more than necessary for safe and reliable energy and we will scrutinise any funding requests to ensure only efficient spending is approved," Ms Savage told the ABC.

A spokesman for the Australian Energy Council, which represents retailers and generators, said it did not know at this stage what impact the recent bushfires would have on power prices.

"But any increases in distribution costs which are approved by the Australian Energy Regulator would ultimately be reflected in customer bills," he said.

In December and January, tens of thousands of people lost power because bushfires damaged electricity infrastructure in several states, with some fire-affected towns such as Mallacoota in Victoria's east cut off.

In NSW's fire-ravaged south-east coast, thousands of Essential Energy customers lost power, although most have had their electricity restored.

Unprecedented damage

An Essential Energy spokesperson said the company had suffered damage to parts of its network, which has been destroyed in some areas.

"While we are still determining the full extent of the damage from these unprecedented fires, it is already clear it is like nothing we have experienced before," the spokesperson said.

"More than 1,900 power poles have been destroyed and more than 37,000 customers have been left without power at some stage."

The NSW government-owned firm said it was looking at replacing destroyed power poles with composite poles, which could withstand high temperatures, and employ other new technology to improve its network.

The disastrous 2018 fire at Tathra on the NSW south coast was linked to faults in Essential Energy's network. ( ABC News: Matthews Roberts )

The Electrical Trades Union secretary Justin Page argues delays in power restoration in NSW are being caused by privatisation and the failure of federal energy regulation.

"In the last five years, the [NSW] Government's privatisation agenda has seen the state's three electricity distributors slash 40 per cent of their workforces, reducing the number of highly skilled workers who would otherwise be busily rebuilding the power network following these fires by several thousand," he said.

The power grid operator, the Australian Energy Market Operator (AEMO), was forced to draw on emergency reserves to avoid blackouts when bushfires in the Snowy Mountains cut the main transmission line between New South Wales and Victoria in early January. It also asked consumers to reduce their power use.

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It also had to draw on emergency reserves in late December to prevent a blackout in Victoria as fires raged across the state amid temperatures above 40 degrees Celsius.

"As the market operator, summer is becoming more challenging as we face extreme weather conditions and frequent natural disasters such as bushfires and storms," the AEMO told the ABC in a statement.

"These risks impact the capacity and availability of generation and network resources."

Urgent network upgrades

The market operator has also called for urgent upgrades to the power transmission network with priority projects including a new undersea power link between Victoria and Tasmania.

The risk of blackouts in Victoria has increased following the closure of the Hazelwood power station and faults at the coal-fired Loy Yang A plant in the Latrobe Valley, as well as outages at a gas plant in the west of the state.

IBISWorld energy analyst James Caldwell said keeping the lights on this summer had pushed Australia's ageing coal-fired power stations to the limit.

"Approximately half of Australia's fleet of coal-fired power stations, generating over two-thirds of generating capacity, are over 30 years old," he said.

"This trend presents a number of problems, primarily that these plants are no longer reliable."

Associate Professor Bruce Mountain, from the Victoria Energy Policy Centre, said there should be more power shutdowns during bushfires to reduce the risk of fires caused by electricity.

"Not a blackout but a brownout, area closures," he said.

"I wouldn't be surprised if the Australian companies start to do a little bit more of that, both in the distribution system and the power voltage lines."