Prepayment for electricity – used predominantly in remote First Nations communities – results in frequent disconnections from power when credit runs out. These disconnections leave homes in the dark without cooling or refrigeration.

Across Australia, over 15,000 households and approximately 65,000 First Nations prepayment energy customers – living in the Northern Territory, Western Australia, South Australia and Queensland – are experiencing extremely high levels of energy insecurity.

New national data on prepayment for electricity

Our research team recently reported on the first national investigation into prepayment customer experiences, producing the Right to Power report. Working with First Nations’ research partners in prepayment regions, we surveyed over 300 households and service providers and accessed data from almost 10,000 customers across 4 of the 5 energy retailers offering prepayment for electricity in Australia. Ergon Energy did not provide data for this research, meaning Queensland remains a critical evidence gap.

Source: The Right to Power report.

We found that in a single year, there were over 440,000 disconnection events impacting 8,878 households across the Northern Territory, Western Australia, and South Australia. On average, customers were disconnected 49 times a year – almost once a week, with disconnections lasting longer than 2 hours.

Source: The Right to Power report.

Targeted policy solutions to protect households

Drawing on our analysis of this data, and informed by discussions and interviews with numerous service providers and electricity retailers across prepayment jurisdictions, we have developed specific and practical recommendations for federal, state and territory governments and energy retailers to implement.

These six actions aim to reduce disconnections, improve energy security and keep First Nations people connected to power:

1. Governments and energy regulators should require better reporting by energy retailers and introduce performance-based monitoring to achieve meaningful reductions in disconnection events.
2. Energy regulators should adopt clearly defined energy hardship metrics, including an obligation for energy retailers to proactively identify and respond to customers in financial hardship.
3. Federal, state and territory governments should remove barriers that exclude prepayment customers from accessing, owning and enjoying the full benefits of consumer energy resources (including rooftop solar), energy efficiency and insulation upgrades, and community microgrids.
4. State and territory governments and energy retailers should implement measures to assist vulnerable people during extreme temperatures and other emergency events.
5. The Commonwealth Government, working with states and territories and regulators, should implement national initiatives such as a Priority Services Register that improves coordination of targeted support for prepayment and other vulnerable customers.
6. State and territory governments should remove mandated prepayment arrangements and provide prepayment customers with the same consumer protections and choice of energy services as non-prepayment meter customers.

One of the key findings of the report relates to protection from disconnection during extreme heat.

We found that disconnection rates more than double during extreme heat. As summertime temperatures and associated disconnection rates begin to rise for another year, urgent action is required by retailers and governments to extend protection during extreme temperatures to avoid and mitigate some of the worst harms associated with prepayment for electricity.

Using smart meter data, we estimated the relationship between daily maximum temperatures and the daily disconnection rate. An example of this finding is shown below. This graph shows that disconnections increase significantly above 39.5 °C.

Source: The Right to Power report.

Escalating disconnection rates during these extreme heat windows present a clear opportunity for intervention to avoid families being exposed to dangerous temperatures inside the home. We propose that governments and retailers implement an exemption from disconnection that applies when the maximum temperature is forecast to exceed 40°C (or 36°C in equatorial zones). To prevent customer debt accrual, retailers would be reimbursed for electricity supplied during protected periods.

This measure is well-suited to federal climate adaptation funding, given the high climate vulnerability of prepayment regions.

The smart meters used in the Northern Territory, Western Australia, and South Australia can already be programmed to grant this exemption. In Queensland, emergency power cards could be provided via local stores in a similar manner to the policy currently applied during cyclone events.

On the basis of credit top-up and electricity use data, we have been able to calculate the expenditure on electricity during days of extreme heat. Total annual expenditure in 2024 on electricity during days of extreme heat was $1,575,986 for prepayment households across the Northern Territory, Western Australia and South Australia. Data for Queensland was unavailable.

This expenditure is lower than the amount allocated via the National Energy Relief Payments (NERP) in the same period. So, based on this example, we expect that a policy that includes an exemption from disconnection during extreme heat would be affordable for the Commonwealth Government.

Coupled with improved efforts by state and territory governments to implement energy efficiency upgrades and lower-cost renewable energy options for prepayment households and communities, these measures would offer considerable protection to prepayment customers struggling to maintain electricity access against some of Australia’s most extreme conditions and cost-of-living challenges.

Extreme heat and other weather risks

Other extreme weather events, such as flooding and cyclones, could also be incorporated into a scheme that supports exemptions from disconnection.

With summer well underway, a trial of this scheme implemented in the 2025/2026 wet season could provide invaluable lessons.

Remote First Nations communities live in regions that experience the hottest temperatures in Australia. There are numerous communities that experience more than 60 days above 40°C, as shown below using 2024 data.

Source: contributed by authors.

This pattern matches historical data from the Australian Bureau of Meteorology for 1981-2018, showing the regions with more than 6 days in January above 39°C. Most of the communities with more than 60 days above 40°C in 2024 are located in the dark red zone shown in the map below.

Source: Australian Bureau of Meteorology.

The urgency of action is reflected not only in historical data. Many of these communities are predicted to face higher temperatures than usual in January 2026. As shown below, this forecast by the Australian Bureau of Meteorology has most of these same communities experiencing higher maximum temperatures.

Source: Australian Bureau of Meteorology.

With another hot summer approaching, it is vital that climate adaptation schemes focus on First Nations communities that regularly disconnect from power due to extreme heat.

Extreme heat events are high-risk events for very young and older people, and those with existing co-morbidities or overcrowded homes. Those living in hotter climate zones were 2.3 to 4.6 times more likely to die during extreme heat than those living in Sydney, Melbourne, Adelaide and surrounding areas.

Disconnections from power during extreme heat are life-threatening public health events. Until housing improves and energy expenditure becomes manageable, remote First Nations communities using prepayment for electricity need support to stay connected to power, as they are disproportionately exposed to the hottest days of harsh Australian summers.

This research was funded by Energy Consumers Australia (ECA) with a collaboration grant.

 Dr Thomas Longden is a Senior Research Fellow at the Urban Transformations Research Centre (UTRC), Western Sydney University.

Dr Kathryn Thorburn is a Senior Research Fellow at Nulungu Research Institute, University of Notre Dame Australia.

Lloyd Pigram is a Research Fellow at Nulungu Research Institute, University of Notre Dame Australia.

This article was prepared with contributions from Lauren Mellor, Clean Energy Program Director at Original Power.

See the video below to learn more about the Right to Power report.

Image credit: Talah Laurie/Original Power