What happens when your retailer fails?

If your energy retailer suddenly goes out of business, the 'Retailer of Last Resort' rules kick in, and you'll be transferred to a new retailer

What happens when your retailer fails?
Photo by Sven Brandsma / Unsplash

It's been a crazy ride for energy retailers and consumers, already this year, effective retail prices have doubled, and seven retailers have been driven out of business.  

Let's take a closer look at what happens when an energy retailer goes out of business.

The first thing to note, is that in Australia, energy retailers do not actually supply your energy, they only supply your bills. So even if your retailer disappears overnight, your energy supply will not be affected.

Retailer of Last Resort

The energy regulations accommodate these scenarios with the Retailer of Last Resort (RoLR) regulation.

RoLR tends to be presented as a mechanism to ensure continuity of supply for energy consumers in the event of an unanticipated closure of an energy retailer. However it's probably more accurate to say that RoLR ensures continuity of billing – supply is not at risk, since the retailer does not actually supply the energy at all.

RoLR is governed by the Australian Energy Regulator (AER) and the Essential Services Commission (ESC) in Victoria. These entities are able to revoke a retailer's license, and transfer their customers to a new retailer if necessary.

Both AER and ESC maintain a register and rules governing which retailer a customer will be transferred to under a RoLR event.

If your energy retailer goes out of business, the process to transfer you to your retailer of last resort will start automatically.

Even if you're notified that your retailer has been deregistered and your account will be subject to a RoLR process, you can still switch to an alternative retailer of your choice at any time. You're not obliged to wait until the RoLR transition is completed.

No matter if you actively initiate a switch to a new retailer, or do nothing and allow the RoLR process to proceed, your energy supply will not be disrupted and you do not need to do anything immediately.

If you, or someone at your premises, require life support equipment, you should contact your new retailer immediately.

Your retailer of last resort will contact you in writing with details. They will explain:

  • the start date of the new arrangements
  • the terms and conditions of the new contract, including prices.

Generally, the RoLR retailer will put you on their default offer plan, which typically will be priced higher than market offers available to you. So it makes sense to immediately switch to the best available plan rather than wait for the RoLR process to complete.

You can find the best priced plan available to you from the Bill Hero results for your most recent bill. If your previous plan from your now out-of-business retailer was the best price available, then this plan may be displayed in your Bill HEro results as being 'more expensive'.

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The RoLR rules in Victoria for both Electricity and Gas are governed by distribution zone.

Electricity RoLRs

VIC electricity distribution zone Retailer of last resort
Jemena, United Energy AGL
AusNet Services EnergyAustralia
CitiPower, Powercor Origin Energy

Gas RoLRs

VIC gas distribution zone Retailer of last resort
Ausnet Services AGL
Australian Gas Networks EnergyAustralia
Multinet Gas Networks Origin Energy

Rest of NEM

The AER RoLR rules across the rest of the National Electricity Market (NEM) are more complicated. Retailers can submit expressions of interest and tender for the right to become a RoLR for a particular location or territory. The expressions of interest can be 'firm' or 'non-firm', and the AER supports the concept of 'default' and 'additional' RoLR retailers.

Here's a simplified list of RoLR retailers across the other NEM states outside Victoria

State Retailers of last Resort
QLD AGL, Origin, Energy Australia
NSW AGL, Origin, Energy Australia, Actew AGL
ACT Origin, Energy Australia, Actew AGL
SA Origin, Energy Australia
TAS Aurora

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