What Happens If Your Energy Company Goes Out of Business?
With energy prices rising and market conditions constantly shifting, it’s natural to wonder what happens if your electricity provider shuts down. While this isn’t a common occurrence, it has happened before—especially during times of high wholesale prices and market volatility. So what should you do if your power company goes bust? The good news is: you won’t be left in the dark. Let’s explore what happens when an energy company ceases operation, and how you can prepare.
How Likely Is It That My Energy Provider Will Shut Down?
Over the past few years, Australia’s energy market has welcomed a growing number of smaller, digital-first providers competing on price and customer service. While this means more choice and often cheaper rates for consumers, it also increases the risk for less-established retailers—especially when wholesale energy costs spike.
Most Australians live in areas covered by the National Electricity Market (NEM)—including NSW, VIC, QLD, SA, TAS, and the ACT—where more than 35 licensed electricity retailers operate. Despite the competitive nature of the market, the majority of these companies remain stable. However, some smaller providers did exit the market during 2022–2023 due to extreme wholesale price volatility. Thankfully, conditions have stabilized as of 2024.
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Will I Lose Power If My Energy Company Closes?
No—you will not lose access to electricity or gas if your energy provider goes out of business. Your energy is supplied by a distributor, not your retailer. If your energy company stops operating, the lights will stay on and your account will be transferred automatically.
In most cases, either:
- A larger retailer acquires the customer base and continues billing under a new name, or
- You are temporarily moved to a Retailer of Last Resort (RoLR).
The transfer is usually seamless, and you’ll be contacted with next steps.
What Is a Retailer of Last Resort?
The Retailer of Last Resort is a government-appointed energy provider assigned to take over accounts if your current company fails. These retailers are typically one of the big three—Origin Energy, AGL, or EnergyAustralia—depending on your state or territory.
The RoLR system ensures that no household or business is left without an energy provider or a valid plan, even if their original retailer becomes insolvent.
What Happens to My Bills?
If your energy provider closes down, you may still need to pay your final bill, especially for energy used before the shutdown. This bill will usually be issued as normal by your former retailer, or managed by an administrator if the company has entered insolvency proceedings.
Once your account is transferred, future bills will come from your new provider. Be sure to check your rates—plans with a Retailer of Last Resort may be temporary or more expensive than market offers.
Can I Still Trust Smaller Energy Providers?
Yes—smaller energy companies can still offer competitive rates and excellent customer service. Many operate efficiently with lower overheads and pass on savings to customers. That said, smaller retailers can be more vulnerable to wholesale price fluctuations, which may increase the risk of closure in uncertain times.
If you're worried, check whether the provider is financially secure or has backing from a larger parent company. You can also regularly compare energy plans to make sure you're on a good deal.
Should I Switch to a Bigger Company Just in Case?
Not necessarily. If your current provider offers good service and low rates, there’s no reason to jump ship purely out of fear. Retailer closures are rare, and even if it happens, protections like the RoLR scheme are in place to help you transition smoothly.
Instead, focus on finding the best plan for your usage and location—regardless of provider size.
What Can I Do to Be Prepared?
The best way to protect yourself from bill shock or service disruptions is to:
- Review your current plan regularly
- Compare energy offers in your area
- Understand your rights in case of a retailer shutdown
- Stay in touch with your energy provider and watch for any major changes
Use our free tool below to see how your plan compares to others available in your area. Whether you're with a big-name provider or a smaller brand, switching could save you hundreds.
If your provider has recently shut down or you're concerned it might, we're here to help. Contact us or use our energy comparison service to find the best deal today.
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