The margin for error is small when your finances are tight. You could come up short at any moment, and the consequences can be far-reaching.
One case in point is that you can have your power cut off in Australia for not being able to pay a bill as low as $300. The threshold will move up to $500 in July this year, but whether that will significantly reduce the rate of disconnections is questionable.
Losing electricity in your home does physical, mental and social damage. Whatever financial strains led to this point will now only get worse, since you can’t do much of anything without power.
There were around 23,000 energy disconnections in Australia last year. According to research by the advocacy group Energy Consumers Australia (ECA), at least twenty times that number are currently at risk of being disconnected.
Losing electricity in your home does physical, mental and social damage
In states and territories under the jurisdiction of the Australian Energy Regulator (ACT, NSW, Qld, SA and Tas), energy retailers are required to assist customers facing a money crisis through hardship programs that stretch out payback timeframes. Victoria’s Payment Difficulty Framework works much the same way.
But as we reported in September last year, many retailers shirk these obligations. And for every energy customer in a hardship program, it’s been estimated that at least two more are in debt but haven’t asked for help from their retailers.
Cutting off power when people can’t pay is not allowed in some countries
A recent project funded by ECA and conducted by researchers at the Royal Melbourne Institute of Technology (RMIT) explores the fact that cutting off people’s power when they can’t pay is not the way it works in several other comparable countries, namely Spain, France and Ireland.
The resulting report was published in the journal Energy Research and Social Science and argues that turning off the lights on households is a long way from the only option retailers and policymakers have.
RMIT researcher associate professor Nicola Willand says energy disconnection is a policy choice.
“Ending harmful disconnections is a policy choice, not an inevitability of how energy markets operate,” says lead RMIT researcher associate professor Nicola Willand.
“If governments and regulators are prepared to act, they can design systems that keep households connected while still allowing energy businesses to remain viable.”
For starters, they could look to more enlightened approaches overseas.
Ending harmful disconnections is a policy choice, not an inevitability of how energy markets operate
RMIT researcher associate professor Nicola Willand
It’s generally illegal to cut off customers who can’t pay their bills in Spain, where the electricity costs of the most financially vulnerable people are shared between retailers and local governments. Vulnerable households can also apply for discounts on their energy bills of up to 65%.
In France and Ireland, households can’t be disconnected during winter. In France and Spain, the energy supply of customers who can’t afford their bills is reduced rather than cut off, allowing them to keep basic household services running.
Some retailers in France and Spain have voluntarily chosen to never cut off a customer’s power.
Co-author of the report, Orla Dingley from University College Dublin, says Ireland’s Energy Engage Code shows how disconnection policy can focus on support rather than punishment.
The commitment to keep engaged customers connected provides a model other countries could adopt
Orla Dingley, University College Dublin
“The commitment to keep engaged customers connected provides a model other countries could adopt,” Dingley says.
RMIT’s Nicola Willand agrees, saying “these examples offer valuable lessons for any country grappling with energy affordability and consumer vulnerability”.
The takeaway message from the report is that disconnections can be banned in Australia without threatening the viability of the energy market.
“Calls for an end to disconnections have previously fallen on deaf ears, with the assumption being that there was no workable alternative. But this research proposes initiatives that may help secure equitable access to essential energy,” Willand says.
ECA executive manager of advocacy and policy Carol Valente says the research “underlines how we must explore alternatives to disconnections, especially for consumers in vulnerable circumstances”, adding that ECA is conducting further research into how retailers, governments and policymakers can better support households that face payment difficulties.
The report makes a few key recommendations to Australian energy retailers and policymakers:
The introduction of legally binding disconnection bans based on medical electricity needs and financial or social vulnerability.
A moratorium on winter and summer disconnections.
Reducing the power supply rather than completely disconnecting a property.
Hundreds of thousands of Australians are currently at risk of being disconnected.
Unlawful disconnections are not rare
The Australian Energy Regulator (AER) has taken action against a number of retailers for illegally cutting off power to homes. But the fines have been tiny in comparison to the size and revenue of these corporations.
In 2019, for instance, Origin Energy paid an $80,000 fine for improperly disconnecting 54 homes. In 2020, AGL paid a $100,000 fine for disconnecting customers who were having trouble paying.
Energy Australia and AGL have also paid AER fines ($1.5 million and $100,000, respectively) for cutting off customers who couldn’t afford their bills.
At the time, the AER was limited to a maximum fine of $100,000 for breaches of the National Energy Retail Law. In February 2021, the limit was raised to $10 million. (The earlier $1.5 million AGL fine was a court-ordered penalty based on multiple breaches.)
The AER has recently conducted several reviews of payment difficulty protections and disconnection policy and made a number of rule change requests to the Australian Energy Market Commission (the energy market’s rule maker) to improve protections for financially vulnerable customers.
In March 2025, energy ministers around Australia signed on to something called the Better Energy Customer Experiences program, which aims to continually review and update consumer protections so they remain fit for purpose as the energy market changes. The AER contributes advice to this reform program.
AER chair Clare Savage tells CHOICE that the regulator “has long been focused on the issue of energy disconnections in both our policy work and in our compliance and enforcement activities”, adding that the AER was the first regulator in the world to issue a “statement of expectations” to energy market participants during the COVID-19 pandemic. (The expectation was that retailers wouldn’t disconnect customers during mandated lockdowns.)
“The research is clear. Early identification of customers experiencing payment difficulty and support for them are vital to getting customers back on track and paying their bills,” Savage says. “It’s important we focus on what else can be done before it even gets to a situation where disconnection is considered.”
It’s important we focus on what else can be done before it even gets to a situation where disconnection is considered
AER chair Clare Savage
Savage says the effort to explore alternatives to disconnection is ongoing through initiatives such as the federal government’s Better Energy Customer Experiences program, which picked up several measures that were recommended in the AER’s Payment Difficulty Framework review.
In November 2023, the AER presented a package of proposals called the “game changer reforms” to energy ministers which called for a number of new protections for customers who can’t afford their energy bills.
“We welcome research that contributes to the discussion about how to better support customers experiencing payment difficulty,” Savage says.
Current protections against disconnection in Australia
There are a number of scenarios in which it’s illegal for an energy retailer in Australia to disconnect a customer who’s overdue on a bill.
The debt is less than $300 ($500 from 1 July 2026) and the customer has agreed to pay this amount within a set timeframe.
Life-support equipment is in use at the property.
The customer is affected by family violence.
The customer had lodged a complaint with an energy ombudsman about a potential disconnection.
The customer is awaiting a decision on an application for a rebate, concession or relief under any government-funded scheme.
Consumers are protected from disconnection during certain timeframes, including afternoons, evenings, Fridays, weekends, public holidays, and between 20 and 31 December.
Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn
Andy Kollmorgen is the Investigations Editor at CHOICE. He reports on a wide range of issues in the consumer marketplace, with a focus on financial harm to vulnerable people at the hands of corporations and businesses. Prior to CHOICE, Andy worked at the Australian Securities and Investments Commission (ASIC) and at the Australian Financial Review along with a number of other news organisations. Andy is a former member of the NSW Fair Trading Advisory Council. He has a Bachelor of Arts in English from New York University. LinkedIn
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