Premier Daniel Andrews has broken his summer holidays to weigh into the high stakes negotiations between aluminium giant Alcoa and power supplier AGL amid mounting concern for hundreds of jobs in Victoria's south-west.

Senior state government sources have confirmed that the talks over an electricity contract for Alcoa's damaged Portland plant have hit a stalemate in recent days, increasing the possibility of Alcoa abandoning Victoria.

The Premier was planning to call AGL chief executive Andy Vesey - who is also on leave - on Friday evening in a bid to get the parties back to the negotiating table.

A source close to the Premier said he intended to reiterate to AGL the importance of keeping Alcoa viable, and to stress that the government would do all it could to save the Portland jobs.

Last week the Saturday Age revealed how Prime Minister Malcolm Turnbull's office had also intervened in the negotiations as political anxiety grew around Alcoa's future in Victoria.

Alcoa has refused to commit to a future in Portland following a major power outage in December that damaged its 30-year old plant and has cost the company about $1 million a day since.

Federal Industry Minister Greg Hunt has also pressed AGL to strike an agreement with Alcoa for the sake of the smelter's workforce and the economy of the state's far south-west.

The power outage in early December caused molten aluminium in more than 200 smelting pots to cool and solidify. It left the smelter all-but crippled and operating at about one-third capacity.

The outage coincided with major financial challenges to Alcoa, including the conclusion of a generous contract struck with the Cain government 30 years ago, and the announcement of the closure of the Hazelwood power station in the Latrobe Valley, which is expected to lead to higher power prices.

Alcoa is Victoria's single biggest exporter and consumer of Victoria's electricity and uses about 10 per cent of the state's power.

Fairfax Media understands that, if struck, the contract will likely be for four years. However, Alcoa is understood to be pressing for a shorter contract.

Mr Hunt and his Victorian Labor counterpart, Wade Noonan, flew to New York in December to meet Alcoa global chief Roy Harvey over the future of the aluminium smelter.

While the governments have remained tight-lipped about the package they offered, Fairfax Media understands it was a total of $240 million to cover the immediate costs of the outage and to help with power costs for the company over the next four years.

A senior state government source said to date there had been no request from Alcoa for an increase in the assistance package.

The smelter directly employs about 660 full-time staff and contractors at Portland, a city of only 10,000. About 2000 spin-off jobs rely on the operation.

But it has been controversial ever since the Hamer government in the 1970s opted to build it 500 kilometres from the state's electricity hub in Latrobe Valley, and the Cain government struck a power contract that turned into an effective subsidy costing Victorians billions of dollars.