Electricity disconnections for non-payment affected over 23,000 electricity customers in New South Wales, the Australian Capital Territory, Queensland, South Australia, Tasmania and Victoria in the 2023-24 financial year. Many more householders were in debt, with potential risks to mental, social and physical health. Researchers and consumer advocates in Australia are calling for a ban on disconnections, however, little is known about the nature and mechanisms of disconnection prohibitions to guide Australian policies and practices.

The European Commission and consumer advocates point to France, Spain and Ireland as “good examples” for disconnection protections. In 2022, these countries presented lower disconnection rates than other member states. Hence, this review explored the characteristics and impacts of disconnection bans in these three countries and compared them with the regions governed by the Australian Energy Regulator and Victoria.

The review found that disconnection bans provided customers mandatory or voluntary, permanent or temporary protection from electricity debt disconnections with or without reduced power supply to protect the health and wellbeing of householders, to allow account holders more time to find payment solutions and to limit economic losses for energy companies.

Residential electricity disconnection rates in Australia were comparable to “good example” countries, however, this measure fails to capture the human impact of disconnection threats. More adequate energy concessions and social tariffs could help improve affordability to electricity and further reduce the rate of disconnections for non-payment. For the energy industry, disconnection bans may reduce bad debt and reputational damage, however, the impact may be unevenly shared. Importantly, the finding that disconnections can be banned without significantly destabilising the energy market highlights the need for an honest and courageous discussion about the potential implementation of more extensive electricity disconnection prohibitions in Australia.

Recommendations for Australia include

• broadening vulnerability categories for year-round disconnection protection to include wider health criteria, income, household composition and energy efficiency of the home;

• progressing collaborative approaches with social and consumer services to solve customer payment difficulties;

• introducing winter and summer disconnection moratoria to protect public health,

• reducing power supply rather than full disconnection to ensure that households retain access to essential energy services; and

• recognising the right to energy and positioning the energy industry as a steward of a basic human right.

Funding source: Energy Consumers Australia