"You have either got to have carbon taxes, which is a blunt instrument, or you have got to go to emissions trading and it has got to be done nationally," he told reporters.

The prospect of a carbon tax is a controversial issue, hitting coal-fired generators which comprise most of Australia's baseload generation, but Broad said it carried some advantages.

"I think sometimes a carbon tax is quite a good thing. A carbon tax is a simple thing that can be understood and what you will do straight away is change the relative mix of generation," he said.

The Federal Government has legislated for electricity retailers to use an additional five percent renewable energy by 2010, while states separately are pursuing their own different schemes on greenhouse issues.

But Broad said after addressing the Electricity Supply Association of Australia conference that separate state programmes risked distorting the marketplace.

Broad also added to calls earlier in the week for a nationally consistent approach on electricity and regulation.

He said the company was pushing for the New South Wales Independent Pricing and Regulatory Tribunal to abandon its revenue-cap network regulation in favour of Victoria's regulatory structure which took into account capital requirements.

EnergyAustralia is the largest New South Wales power retailer with more than 1.4 million customers. It has also moved to become a gas retailer as part of a dual-fuel supplier strategy.

Broad said the retailer business was focussing on defending its position in New South Wales, which opened up to full competition in January.

He said the company would look at making limited inroads into the Victorian market focussing on the top-end of the residential sector and on small to medium businesses

"Our strategy at the moment is to be looking after our home turf. Our expansion and our growth is on the back of an incredibly strong brand we have in our own market," he said.

"We will grow in Victoria but it will be very limited and targeted. We will not come in here on a massive campaign."

Broad said the impact of the Victorian state's governments price cap on new retail competition would depend on the wholesale market, which in turn would be affected by interconnection with the New South Wales grid.

Broad said there was currently a high risk of capacity constraints in Victoria on very hot days.