Vic power station fire threat passes

A fire in an open-cut coalmine in eastern Victoria remains a key concern for firefighters, but it no longer threatens power supplies.

The 4400-hectare fire has been burning in piles of coal from the Hazelwood mine, near Morwell, while another fire in wood chips and logs at the Australian Paper mill complex has been contained.

Only two of the Hazelwood power plant's eight generators were left operating as the fire cut the power supply to the mine.

However, company spokesman Trevor Rowe said power had since been restored to the mine, allowing crews to get sprinklers working and equipment back online.

"It's a much-improved situation and getting better," he said.

Mr Rowe said the third and fourth generators were now operating, while the fifth was scheduled to resume later on Tuesday.

The news came as a relief to Latrobe City Council Mayor Sharon Gibson, who praised volunteer firefighters for their hard-fought battle.

"Many don't realise that they're not just fighting for our community - they're fighting for the whole power supply for the state," she said.

Energy Supply Association of Australia chief executive Matthew Warren said on Tuesday there was no threat to the state's power supply, and electricity demand was below record levels.

Fires Services Commissioner Craig Lapsley said the fire would be difficult to put out.

"It still has not impacted on the ability to produce power, but it is in an area that is causing some level of difficultly to suppress," he said.

The fire's thick, black smoke was also a problem, he said.

Health officials issued a low-level smoke alert on Tuesday, urging the elderly, children and those with existing health problems to stay indoors.