Prime Minister Julia Gillard has refused to confirm if Victoria's Hazelwood power station could be shut down as part of the carbon pricing package.
Ms Gillard said the federal government's plans for the power station would be revealed when it releases the full details of the scheme.
"All of the details on the carbon price package, how we drive that clean energy future, we will obviously have something to say about that when we're in a position to announce all of the details of the scheme," she told reporters in Melbourne.
"We're still working hard to finalise all details of the scheme."
The prime minister said she wanted to assure the 800 people working at the power station in the Latrobe Valley that the ALP's policy priority was to protect jobs.
"What I can say to people in power stations around the nation, including Hazelwood, is there's nothing more important to me than the jobs of Australian working people.
"There's nothing more important to this Labor government than ensuring people have got the benefits of work."
It says federal Energy Minister Martin Ferguson has flagged the possibility of the government paying to retire Hazelwood, Australia's `dirtiest' coal-fired station, or the smaller Playford plant in South Australia.
Victorian Premier Ted Baillieu said more information is needed about any plans to close Hazelwood.
"Hazelwood supplies a significant amount of Victoria's energy," Mr Baillieu told Fairfax Radio on Friday.
"It's brown coal based, in that respect there's a mission there to reduce emissions from brown coal.
"But there's no use just saying we're going to close it down without a plan to replace it, without a plan to deal with the cost of it and who's going to pay for it."
Environment Victoria said the inclusion of funds to close Hazelwood in the carbon price package would be a breakthrough in tackling climate change in Australia and could ensure the scheme delivered significant emission reductions in its early years.
"Hazelwood is the most logical power station to target with a closure fund, given that it is the most inefficient power station in the country, and that Hazelwood's owners have signalled that they are willing to consider closure," Environment Victoria campaigns director Mark Wakeham said.