AGL, which is also a partner in the giant Macarthur windfarm project, is awaiting State Government planning approval for its Tarrone development which would boost the state's power capacity by about 10 per cent.

The Standard was told yesterday a special planning panel which heard evidence earlier this year in Port Fairy submitted its report to Planning Minister Matthew Guy on Tuesday.

He is expected to release the report within 28 days before announcing his decision on the huge project.

For weeks the construction industry rumour mill has been confident AGL plans are set to go when the government gives the green light.

It will bring hundreds of jobs to the district and fill in a construction gap left by the soon-to-be-completed Origin Energy gas plant at Mortlake.

There is speculation AGL is keen to get the gas-fired station running to supplement the Macarthur windfarm in meeting its power supply commitments.

The company told The Standard this week it would consider final construction approval when it had gained ministerial planning approval.

Santos forecast last year it was unwilling to proceed with its $800m Orford power station until there was more certainty on federal government plans for a carbon tax.

Yesterday the company's media spokesman Matt Doman said the project was still on the backburner despite gaining state government planning approval in November.

"The company wants it to go ahead, but is awaiting carbon policy certainty," he said.

"We can't advance the project at this stage and won't be selecting business partners until there is clarity on government policy."

Santos proposed a base load power station with a 500mW first stage which could be expanded to 1500mW.

AGL and other electricity producers have also expressed hesitation on future projects because of carbon tax uncertainty.