The short answer
What happens when your energy retailer fails
When an energy retailer fails or pulls out of the market, it sounds like a disaster waiting to happen: no power, no provider, no idea what to do. In Australia, that is not how it works. The Australian Energy Regulator runs a safety net called the Retailer of Last Resort, or RoLR. If your retailer goes under, you are transferred automatically to a designated backup retailer, and your electricity and gas keep flowing the entire time. You do not lose connection, and you do not have to lift a finger to keep the lights on. Here is the part most coverage misses: a retailer collapse is not a supply emergency, it is an admin and pricing event, and the only real danger is doing nothing afterwards.
Here is the core takeaway in one line: if your retailer goes bust, the Retailer of Last Resort scheme transfers you to a designated backup retailer automatically, your power and gas never stop, and the only thing you actually need to do is check the plan you have been moved onto. The common assumption is that a retailer failing means scrambling to find a new provider before you get cut off. That is exactly backwards. The supply side is handled for you. The bit that is not handled for you is the price, because the safe default plan you land on is usually dearer than the deal you were on.
Reframe the assumption: a retailer collapse is not an emergency about keeping the lights on. The lights stay on by design. It is an admin and pricing event, and the way it quietly costs you is through inertia, not through any interruption to your supply.
The blind spot
Why most advice about a failed retailer misses the point
Most coverage of a retailer collapse does the same three things, and each one points you at the wrong worry.
First, it frames the event as a supply scare. The headline implies you are about to be cut off and need to act fast. You are not, and you do not. The RoLR scheme exists precisely so there is never a gap, so the panic is misplaced and the genuine issue, your new rate, gets ignored.
Second, it stops at "you have been transferred" and calls it solved. Being transferred is the start of the story, not the end. You have been moved onto a standing or default offer that is a safe floor, not a sharp deal. Treating the transfer as the finish line is how households drift onto a dearer plan for months.
Third, it ignores the admin that does not follow you. Your supply moves seamlessly, but your credit, your final bill and your concession do not always come with it. Advice that says "you are protected, relax" skips the part where you have to reconcile money and re-register a concession card, which is where real dollars are lost.
How the safety net actually works
Expert analysis: the machinery behind a RoLR event
How RoLR works, step by step
When a retailer can no longer trade, surrenders its licence or exits the market, the Australian Energy Regulator triggers the Retailer of Last Resort scheme. It has already designated which retailer will pick up the failed retailer\'s customers, so the handover is planned, not improvised. Your account is transferred to that designated retailer automatically. Crucially, your physical connection sits with the network business (the poles and wires), not your retailer, so nothing about the transfer touches your actual supply. The power and gas keep flowing the entire time, and you are contacted afterwards to confirm the move.
What does and does not carry over
This is the trap. Supply carries over seamlessly. The admin does not. Any credit on your account, or any balance you owe, has to be reconciled with the failed retailer through a final bill or the administrator handling the closure. Your concession or rebate often needs to be re-registered with the new retailer, because the new account starts without it. Any open complaint or dispute may need to be picked up again. None of this stops your power, but all of it can quietly cost you if you assume everything followed you across.
Why small retailers fail and the big ones rarely do
It comes down to hedging. The large gentailers own generation, so when wholesale prices in the National Electricity Market spike, they are largely insulated. Small, cheap-looking retailers often buy power on the spot market with little hedging, so a sustained wholesale surge can blow up their costs faster than they can recover them. That is what played out during the 2022 wholesale price crisis, when a wave of small retailers told customers to go elsewhere or exited the market entirely. A headline rate that looks too good can be a retailer carrying more wholesale risk than it can survive.
The pricing trap: landing on a standing offer
When you are picked up under RoLR, you are usually placed on the designated retailer\'s standing or default offer, priced at or near the regulated reference price (the Default Market Offer, or the Victorian Default Offer in Victoria). That is deliberately a safe, capped default, not a competitive market deal. So if you were on a sharp plan with your old retailer, the move can mean a higher rate. The default is fine as a landing spot. It is a poor place to stay, and that is precisely why doing nothing afterwards is the expensive choice.
Interactive explainer
What happens when your retailer closes
Click through the five stages of a Retailer of Last Resort event. Notice how the first three need nothing from you, and the real work only starts at the end.
Stage of : your retailer of last resort journey
Tap a stage to see what it means and whether you need to act.
This is the process, not a price estimate. The point is the shape: the first three stages keep your supply on with zero action from you, and the value of acting only appears at stages four and five. Source: Retailer of Last Resort scheme, Australian Energy Regulator (aer.gov.au).
The same steps, in plain text
The five stages of a Retailer of Last Resort event
The same journey as the explainer above, written out. Your supply is protected from stage one; the action you need to take only arrives at the end.
| Stage | What happens | What you do |
|---|---|---|
| 01 Your retailer fails or exits |
The retailer can no longer trade, surrenders or loses its licence, or simply pulls out of the market. This is usually a financial or commercial event, not a network or supply fault. Your physical connection is untouched. | No action needed |
| 02 The AER designates a Retailer of Last Resort |
The Australian Energy Regulator triggers the RoLR scheme and names a designated backup retailer to take on the failed retailer's customers. This is planned in advance precisely so there is never a gap. | No action needed |
| 03 You are transferred automatically, supply never stops |
Your account moves to the backup retailer without any disconnection. Your power and gas keep running through the whole handover. You will be contacted by the new retailer to confirm the transfer and your details. | No action needed |
| 04 You land on the backup retailer's default offer |
RoLR customers are usually placed on the designated retailer's standing or default offer, priced at or near the reference price (the DMO, or the VDO in Victoria). That is a safe default, but it is often dearer than the sharp market deal you may have been on. | Check your new rate |
| 05 You compare and switch to a better plan |
Once your supply is safe and your final bill with the failed retailer is sorted, compare plans against the reference price and switch to a better one. Re-register any concession or rebate, because it does not always carry across automatically. | Compare, switch, re-register concessions |
What this means for real households
How misreading a RoLR event costs you money
The steps above are not academic. Here is exactly how households make the wrong call after a retailer fails:
They panic about supply instead of price
A household hears their retailer has collapsed and burns energy worrying about being cut off, ringing around, stressing over a blackout that the RoLR scheme guarantees will never come. Meanwhile the standing offer they have quietly been moved onto, which is the thing actually costing them more, goes unchecked for months.
They treat the automatic transfer as job done
Because the handover happens without them lifting a finger, many assume the system has sorted everything, including the price. It has not. They stay on the default offer long after their supply is safe, paying a rate set as a regulated yardstick rather than the competitive deal they could switch to in minutes.
They lose credit and concessions in the cracks
A customer who was in credit with the failed retailer, or who had a concession card registered, assumes both followed them across. Often neither did automatically. The credit has to be reclaimed through the final bill or administrator, and the concession has to be re-registered with the new retailer, or it simply stops applying.
They chase a deal that was never sustainable
Some households go straight back to the cheapest headline rate they can find, the same kind of unhedged, wholesale-exposed offer that failed in the first place. When the next wholesale spike hits, they risk being moved through RoLR all over again, rather than choosing a retailer that can actually weather a price surge.
The insider insight
The cheapest retailer is often the most likely to fail
Here is the uncomfortable pattern the standard "just switch to the cheapest plan" advice ignores. The retailers most exposed to a RoLR event are usually the small, aggressively cheap ones, precisely because they cannot hedge their wholesale costs like the big gentailers can. A rock-bottom headline rate is sometimes a sign of a business carrying risk it cannot absorb, not a clever deal you found before everyone else.
The non-obvious truth: a RoLR event is the market quietly telling you that an offer was too good to be sustainable. The 2022 wholesale crisis wiped out a clutch of these cut-price retailers almost overnight. The lesson is not to avoid switching, it is to weigh the rate against the retailer\'s resilience. A plan a few dollars dearer from a retailer that can ride out a wholesale spike can be worth more than the cheapest rate from one that cannot, because being shunted onto a default offer and re-sorting your concession is its own hidden cost.
So the practical lesson is not "never chase value", it is "chase value with your eyes open". The cheapest number on the page is not free of risk, and the RoLR scheme is the proof.
Grounded in the analysis
What you should actually do
Moves that follow from how a RoLR event really protects, and does not protect, you.
Confirm supply and details, then breathe
Your power and gas keep running, so there is no rush on supply. Wait for the backup retailer to contact you, confirm they have your correct address and account details, and ignore any pressure to act as if you are about to be cut off.
Reclaim credit and re-register concessions
Chase any credit you were owed by the failed retailer through the final bill or administrator, and reconcile any balance. Re-register your concession card or rebate with the new retailer, because it does not always carry across automatically.
Compare against the reference price and switch
You have been placed on a standing or default offer that is usually dearer than a market deal. Judge plans against the DMO (or the VDO in Victoria) and switch to a better one. Weigh the rate against the retailer's ability to survive a wholesale spike.
In a NEM state (QLD, NSW, ACT, VIC, TAS or SA)? Compare electricity plans against the reference price and switch off the default offer. In WA or the NT, the government retailers (Synergy and Power and Water) do not fail the same way, and there is no retail competition to compare.
Current figures, last updated 2026-06-15
Key Retailer of Last Resort facts. Sources: the Australian Energy Regulator (aer.gov.au), the Australian Energy Market Operator (aemo.com.au) and the relevant state regulators. Scheme details and reference prices are reviewed regularly; confirm before relying on them.
The bottom line
Why this matters right now
As more coal retires and wholesale prices stay volatile, small unhedged retailers will keep coming and going, which means RoLR events are a feature of the market, not a freak accident. The good news is the part everyone fears, losing supply, simply cannot happen: the scheme is built so the lights stay on. The risk that is real is the one nobody talks about, drifting on a dearer default plan and losing a concession or credit in the handover. So if your retailer ever goes bust, do not panic about the power. Confirm your details, reclaim what you are owed, re-register your concession, and then judge a new plan against the DMO or VDO and switch. That is how you turn a retailer collapse from a scare into a smaller bill, in the states where you can act on it.
Common questions
A Selectra expert answers your questions about a failed retailer
No. This is the single most important thing to understand. Your physical connection is handled by the network (the poles and wires business), not your retailer, and the Retailer of Last Resort scheme guarantees there is no gap in supply. When a retailer fails, the Australian Energy Regulator transfers you to a designated backup retailer automatically, and your electricity and gas keep flowing the whole time. You will not be disconnected, and you do not need to do anything to keep the lights on.
RoLR is the safety net that protects energy customers when a retailer can no longer trade. Under the national energy rules, the Australian Energy Regulator can trigger a RoLR event and appoint a designated retailer to take on every affected customer. It is set up in advance so the handover is automatic and supply is never interrupted. Its job is continuity, not a great price, so the plan you are moved onto is a safe default rather than the cheapest deal available.
Not automatically, and this is where people get caught. Your supply transfers seamlessly, but the admin does not always follow. Any credit or outstanding balance has to be reconciled with the failed retailer, usually through a final bill or the administrator handling the closure. Concessions and rebates often need to be re-registered with your new retailer, because the new account does not know about them. Check your concession is reapplied and chase any credit you were owed, otherwise you can quietly lose money you are entitled to.
Because of how they buy power. The large gentailers own generation and can hedge their wholesale exposure, so a price spike in the National Electricity Market hurts them far less. Small, cheap-looking retailers often have little or no hedging, so when wholesale prices surge their costs explode overnight. That is exactly what happened during the 2022 wholesale price crisis, when a wave of small retailers told customers to leave or exited the market entirely. A very low headline rate can be a sign a retailer is carrying more wholesale risk than it can absorb.
Treat it as a prompt to shop, not as something to ignore. First, confirm your supply is uninterrupted (it will be) and that the new retailer has your correct details. Then check the rate you have been placed on, because the standing or default offer is usually dearer than a competitive market plan. Compare plans against the reference price and switch if you can do better. Re-register any concession card or rebate, and make sure your final bill with the failed retailer is reconciled so you are not over or undercharged.
The risk is different there. Western Australia and the Northern Territory are not part of the National Electricity Market and do not have open retail competition for most households. In WA the main retailer is the government-owned Synergy, and in the NT it is Power and Water. These government retailers do not fail and trigger a RoLR event the way a small private retailer in the eastern states can. So if you live in WA or the NT, a sudden retailer collapse is not the same concern, but you also cannot shop around to a cheaper plan the way an eastern-states customer can.
