The Victorian Government has urged Federal Treasurer Joe Hockey to intervene to avoid rural households being charged for bushfire safety improvements.

Electricity distributors Powercor and AusNet Services were being charged extra income tax after receiving State Government grants to replace power lines in bushfire-danger zones.

The companies successfully argued to the Australia Electricity Regulator that the $14.5 million shortfall should should be passed onto households.

State Energy Minister Russell Northe said he had written to his Mr Hockey seeking intervention.

“I hope he will take up the cause, my understanding is that his reaction and certainly that of the Premier is that this is wrong,” he said.

“I would love to see an outcome … where company tax won’t apply to these particular grants.”

Mr Northe said the energy regulator’s decision was at odds with the intention of the government grants.

“It goes right against the principle of what this funding is intended for,” he said.

“It’s certainly not intended to charge customers to ensure we have bushfire mitigation practises put in place, it goes against the spirit of the royal commission recommendation.”

Earlier this month, Premier Denis Napthine met with Mr Hockey over the issue and after the talks he said the Treasurer made it clear there was no justification for a price rise based on the increased infrastructure funding from the state.