A $100 MILLION price tag has been put on the past week's scorching heatwave, which has triggered chaos across the state.

The estimate from business came as hundreds of firefighters were last night battling a blaze that destroyed homes in Gippsland and threatened a vital power line to Melbourne.

The Victorian Employers Chamber of Commerce and Industry said the construction industry was worst hit, with workers forced to abandon sites as temperatures hit the 40s.

Thousands more businesses suffered lost productivity when workers turned up hours late after being stranded by the failed public transport system.

VECCI workplace relations chief David Gregory said Friday night's black-out, which left 500,000 homes and businesses without power, would drive the cost of the heatwave up to more than $100 million.

As the state continued to swelter, up to 20 houses were destroyed in a fire - believed to have been deliberately lit - that raged across Gippsland, threatening Boolarra, Yinnar and Mirboo North.

The fire threatened a major transmission line supplying electricity to Melbourne, while power generators in the Latrobe Valley went on high alert.

Denis Bawden lost his house in Boolarra.

He was furious an arsonist might have sparked the fire.

"It's senseless. What do you get from it? It's ruining people's lives," Mr Bawden said.

Moe police sergeant Martin Rynsent said officers were on alert for looters.

The State Government announced emergency help for people affected by the fires, offering $1000 instant payments and means-tested grants of up to $22,000.

Prime Minister Kevin Rudd described the damage caused by bushfires as "appalling".

"The southern part of the nation is a tinder box right now," he said.

Victoria Police said 26 people died suddenly in the heatwave, an "unusually high" number.

But they could not say how many were directly caused by the heat.

Almost 90 people sought treatment for heat-related conditions at the Alfred, Sandringham and Royal Melbourne hospitals.

Ambulance services were called out 60 times yesterday to help people suffering heat stress.

Melbourne's water storages plunged by 0.7 per cent in a week, down to 33.1 per cent capacity, as Victoria recorded its second-driest January on record.

At least 26 Connex trains were cancelled yesterday and 25 V/Line services were replaced by buses.

Wimmera hamlet Jeparit may have recorded the state's hottest temperature - 50.9C on Wednesday. Jeparit CFA volunteer Alicia Rosewall measured the top temperature on her back porch and said she had never seen it so hot.

Officially, the weather bureau said Avalon Airport was the hottest spot in the state, recording 46C on Thursday.

About 100 customers remained without power yesterday, some for the third day.

Opposition Leader Ted Baillieu said Melbourne's meltdown was embarrassing, with the eyes of the world on the Australian Open.

"We run the risk of being a laughing stock internationally," he said.

"We have an important international event in Melbourne at the moment and people can see what is going on here - not enough water, not enough power, trains out, blackouts and the Government scrambling around making excuses."

Premier John Brumby defended Victoria's power system, but said he could not guarantee another "catastrophic incident" would not occur.

"We're in uncharted waters, unprecedented conditions," he said.

"I can never guarantee that there won't be an explosion at the grid or that fires won't get into power lines."

Before a cool change arrived, the Government came close to invoking emergency powers to restrict energy use.

The meltdown made international headlines, with London's Daily Telegraph reporting: "There was chaos in Melbourne. . . Commuters, described as 'cooking in the heat', were stuck on trains and trams for hours."

- Ellen Whinnett, Peter Rolfe and Kellie Cameron