Fire threatening Vic power assets

A massive fire burning in eastern Victoria has the potential to damage the state's power generating infrastructure.

The 2500-hectare blaze, which has already destroyed homes, burned into an open cut coal mine near Morwell on Monday, while fire damage has restricted operations at the Hazelwood power station.

Fire Services Commissioner Craig Lapsley said the blaze was the highest priority for the state's emergency services.

"It is not threatening lives but it certainly has the potential to impact on critical infrastructure for Victoria," he told reporters.

The fire is smouldering piles of coal from the Hazelwood mine and burning in wood chips and logs at the Australian Paper mill complex.

Mr Lapsley said putting out the fire at the mine would be a delicate operation because firefighters had to ensure no heat or burnt coal is accidentally sent into the generator.

"That will be a lengthy operation, and for those living in Morwell, a very uncomfortable operation because it will be black smoke over the town, most of the time," he said.

"It's more than just a fire. It's about health issues within the town."

He said paramedics were on standby as officials monitor air quality.

Hazelwood power station has been unable to operate its coal dredgers or conveyor lines since fires burning in the Latrobe Valley brought down SP AusNet power lines on Sunday night.

Only two of its eight generating units are operating.

Firefighting authorities in the Latrobe Valley are working to ensure power lines are intact so power generated by the Hazelwood station can been delivered.

Traralgon incident control centre's Laurie Jeremiah said conditions on Monday were not as severe as Sunday, but a number of fires are yet to be controlled.

"We're concentrating on the area near people's properties and people's residences," he said.

He said firefighters have contained all blazes north of the Latrobe River but homes north of freeway west of Morwell may have been lost.