The Tasmanian Government will interfere with the regulations regarding its State power prices.

Premier David Barlett addressed the Parliament today that legislation will be modified to ensure that Hydro Tasmania will successfully sell electricity to Aurora Energy for a reasonable price.

Aurora had complained that Hydro's practices were hurting its profitability.

"Aurora Energy and Hydro Tasmania transact on the basis that Hydro Tasmania to sell its share of electricity for supply to non-contestable customers at a fair and reasonable price which the Treasurer will determine," Mr. Barnett told Parliament.

"The Government will immediately seek to regulate the relationship between the Hydro Tasmania and Aurora Energy to ensure Aurora is able to buy energy at a fair and reasonable price, and operate sustainably."

Mr. Barnett added that the government's intervention is to ensure that Aurora will not buy the whole wholesale power at a higher price and to correct both their systems.

However, Peter Gutwein, the Opposition spokesperson, said that the Premier's announcement was useless as it did not answer the issues on capping power price increases for householders and small businesses.

Premier Barnett also said the government will conduct a review on Tasmania's power industry to provide and deliver the lowest prices possible.

He brushed off statements from the State Opposition that the government has known about the power prices problems only for months, even before the March election.