Energy supply safe this year, says Govt

The Federal Government has reassured electricity users their supplies will not be threatened this year by the drought.

Falling water reserves have put pressure on electricity generators that rely on water, such as hydro and coal.

But the national electricity grid manager, NEMMCO, has told state and federal energy ministers they will be able to meet demand even if there is no rain, barring a catastrophic event.

Federal Industry Minister Ian Macfarlane says the situation will be reviewed in August, but short-term demand will be met.

"With normal or even sub-normal rainfall over the next six months and normal demand, there is not expected to be an impact on electricity supply," he said.

"They have said, though, that of course you can never rule out an abnormal event in generation and transmission."

Victorian Energy Minister Peter Batchelor says households and businesses will see a small rise in electricity prices next year because of the rising wholesale prices.

"When the contracts and the price contracts for large users and the new retail price path is determined in the year ahead, we will expect there will be an increase in electricity prices in Victoria," he said.

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