The Member for Bathurst says he has been told by Energy Australia claims the Wallerawang power station is closing are just rumours.
The Australian Workers Union says employees at the facility have been told the plant will be mothballed by March.
Energy Australia bought the power plant along with a facility at Mount Piper from the state government in July for $160m.
The Nationals' Paul Toole, says he has spoken to the company about the concerns.
"I'm hearing lots of different rumours, lots of speculation at the moment by the unions, in relation to the power stations at Wallerawang," he said.
"One of the things that I've done is that I've actually made very strong representations to Energy Australia to ascertain exactly what is happening and Energy Australia have indicated that they are reviewing their operations and what they are hearing at the moment is rumour."
Mr Toole is calling on Energy Australia to reassure residents about the future of the Wallerawang power plant.
"I want to make sure that Energy Australia can take away any of this anxiety that is out there and also to come back out and let the community know that they wish to continue and have a very strong presence here in the local area," he said.
"I'll be continuing to make representation on behalf of the community of Lithgow and surrounding villages to find out exactly what is happening."