International Power has dismissed media reports the company is close to striking a deal to close Hazelwood Power Station as "speculative", but admit they would be willing to accept compensation to close the plant.
Reports in the The Age last week suggested Hazelwood could be brought out as part of a deal being brokered to secure a carbon price package.
According to The Age the deal would include a plan to pay for the closure or conversion of at least one of the nation's coal-fired power stations and suggested Hazelwood or South Australia's Playford plant as likely candidates.
In a written statement International Power said it was continuing to have "negotiations with the Federal Government in good faith".
"We have said on numerous occasions that we are open to the potential for a full phased closure of older brown coal-fired plant over a sensible period of time in return for a financial package that respects our long-term investment in the asset," the statement said.
"As we have repeatedly told the Federal Government, if the value of generation companies is destroyed through regulatory change, then the Australian government will send all the wrong signals to investors, Australian workers and their local communities."
"My theory is that these deals have been done, but the union movement and the workforce and the community as a whole isn't a part of the equation," Mr Parker said.
He said transition away from coal-fired power generation needed to include job replacement for workers affected by the change.
"If the chain goes on the gate and the workers haven't been satisfied and the comm hasn't been satisfied our members will react," Mr Parker said.
"At the moment they're tolerant and have an understanding about how transition and job replacement will take place.
"As long at that takes place they will accept it, but if there is no jobs to replace it they will react."
Environment Victoria campaigns director Mark Wakeham said media reports about the phased closure of Hazelwood were "an encouraging sign that the negotiations are heading in the right direction" but wanted to see the detail.
He said the reports suggested the deal would represent better value for money than the $7.3 billion compensation package proposed under the Rudd Government's carbon pollution reduction scheme.
"We think it's important we're beginning to start closing units at power stations like Hazelwood in the next two to three years," Mr Wakeham said.
"The day that Hazelwood is fully closed will be a very significant environmental outcome but we need to be sure we deliver good social outcomes as well."
He backed sections of Professor Ross Garnaut's report to the Federal Government which suggest $1 billion over four years to help regions such as the Latrobe Valley transition away from carbon-intensive industries.
A deal on carbon pricing is expected within weeks following further negotiations between the Federal Government and its partners in the Multi-Party Climate Change Committee.
Gippsland Trades and Labour Council secretary John Parker said any deal to phase out Latrobe Valley power stations should involve union and community input, rather than just talking "to multi-national corporations who will walk away from our shores with a bag full of money".
"We haven't got a plan at all of what the future power generating capacities (will be) over the next 10 years," Mr Parker said.
He said plans were based around the notion the private sector would provide "the answer" in addressing future electricity generation needs, which would not produce outcomes that benefited the community.