Losing power to your home is always tricky. The fridge stops working, air conditioning and heating stops, lights go out. For many remote communities relying on expensive diesel fuel power and prepaid electricity, power disconnections happen all too regularly.

This is an excerpt from an ABC Radio National interview with Lauren Mellor, clean energy program director at not-for-profit Original Power.

Pre-payment metering, where energy customers — largely First Nations communities — pay for electricity up-front before they use it, is in operation in the Northern Territory, far north Queensland, large parts of the Kimberley in Western Australia, and the APY lands in South Australia.

Similar to a prepaid mobile phone, the prepayment system means an energy customer needs to get to the store, top up a special card with credit, bring that credit back to the home, and plug it in to the meter on their household. Only then can that household access power — until the credit runs out.

In the Northern Territory, some 10,000 predominantly First Nations energy customers in urban and remote communities rely on a mandated pre-payment electricity metering arrangement. 

Lauren Mellor from Original Power told the ABC, "We've got disconnections happening on average every four days for First Nations energy customers on prepayment in the Northern Territory. And that situation increases every time we have a spike in hot weather. So we actually see disconnections happening on average every three days. And this is for a period of 8 to 10 hours or more."

Lauren explains that disconnection put a lot of pressure on those households, particularly in very hot weather.

“Money's got to be put together, or there might be pressure on someone in that household to fix that issue out. We see huge social and economic upheaval in these communities as a result of the energy insecurity that's happening with the pre-payment arrangements. You see families walking the street in 40 degree weather asking other family members and neighbours to chip in to help them reconnect their power, just so they can switch an air conditioner on in incredibly hot weather or very cold weather.

“It's very disruptive to the social fabric of these communities."

Household power disconnections is an issue largely hidden from the public discourse in Australia. Most of the population enjoy ‘postpaid’ energy systems, where you pay for electricity after you use it, usually after receiving an electricity bill from the electricity provider. In the postpaid system, energy disconnections are an anomaly, and if they happen, everyone is talking about it!

Lauren say disconnection rates in the Northern Territory where prepayment electricity systems are used are currently not reported on.

“Families are really struggling with capacity to pay and to remain connected, but the situation is largely hidden. And all of the usual consumer protections, including hardship protections that would apply to [post-pay] energy customers don't apply here in the Northern Territory."

Lauren says there's never been a comprehensive argument put as to why prepayment needs to be in place in the Northern Territory.

"It's simply mandated across most Aboriginal communities in the Northern Territory. So by virtue of your postcode or your social housing arrangement, you are largely mandated to be on a prepayment arrangement. Presumably it's because the retailer … wants to flip responsibility back onto the customer, to say we don't think that these communities have capacity to pay. And so we'll make it easy for the retailer and simply cut people off if they can't afford to top up their credit."

That means "the usual hardship protections that retailers are obligated to offer to customers in those situations just don't apply to First Nations communities. It is a real disgrace."

While power prices in the Northern Territory are already high, prepayment customers in remote areas often rely on expensive large scale diesel generators for their power supply, without any consumer protections.

First Nations-led renewable energy projects

Original Power has been working in partnership with a number of First Nations communities to tackle some of these energy challenges through community-led renewable energy solutions, including in Marlinja, Boroloola and the Gulf of Carpentaria.

“Communities are actually leading the way, unlocking investment ... and upgrading power systems for the benefit of not only that community, but the Northern Territory government, which is saving significantly on avoiding those diesel generation costs. So we do see that as being the only pathway to bringing power prices down in the Northern Territory -- a significant commitment to decarbonising and doing away with diesel generation in the remote areas … and enabling policy and a coordinated approach to unlocking that investment."

Marlinja, located north of Tennant Creek, is a community of about 60 people who were battling high disconnection rates from prepayment meters for decades. The community worked with Original Power over a number of years to raise two thirds of $1 million to install a solar microgrid in their community in June 2024.

Lauren says, “But first, we had to overcome the pre-payment barriers, which meant simply to get the credit applied to household meters so that the residents actually saw some benefit from that investment. It took 2 to 3 years of working with with the retailer here, and Power and Water Corporation which is the network operator and utility, to find a pathway for those communities to actually benefit from those sorts of projects.

"So there are real regulatory barriers here that have added risk, cost and delays to these sorts of initiatives. But I am really pleased to say that through that level of collaboration, finding the solutions together with government, with communities, we are starting to find a pathway forward."

Another community-led renewable energy project is due to start construction in Borroloola later this year. This will be the first utility-scale majority First Nations-owned solar microgrid, a $16 million project driven by a community that has continued to push for solutions. The project will likely reduce household power prices by up to 80% and the Northern Territory government’s budget will be boosted by $1.2 million in diesel savings every year.

Lauren says, "You just can't have functional communities and regional development without access to basic essential energy services that other Australians take for granted. And you might not have a whole lot of rainfall and water in central Australia, but you have a heck of a lot of sunshine. Turning that into solar energy, once you're able to to harness that, it sounds like it makes a huge difference. Absolutely. It's the way forward."

But work doesn’t stop there.

Original Power is calling on the Northern Territory Utilities Commission to expand the retail code to include pre-payment customers for the first time, and also to report disconnections.

“Without that data and without the analysis, there is no response at a policy level to those experiences for prepayment customers,” says Lauren.

“It is a shame those communities don't have capacity to pay. But instead of taking responsibility for addressing the price crisis, governments are instead putting that responsibility back, in a punitive sense, through automated disconnection, which throws families and entire communities into chaos without power."

Investment is key

"Most Australians understand that the path to bringing power prices down is to invest in lower cost generation,” says Lauren. "So that needs to apply to remote and First Nations communities. And those communities really need to be brought into the energy transition in a way that is fair and inclusive."

Lauren says finance is key, with renewable energy projects delivering returns to investors who work in partnership with communities.

“Removing some of those barriers for prepayment and for First Nations community customers to be able to benefit from both rooftop solar …these sorts of barriers need to be pushed aside so that communities can work on those solutions with investment partners and with industry capability partners. That's the way forward we're seeing with the microgrid projects we're developing. They're really exciting, both in terms of opportunities for government to lower costs, and for community and consumers to see the benefits of renewable energy."

This Radio National interview was first broadcast on 7 May 2025.

Thanks for use of the photo Rachel Mounsey, of Chantelle Johns at her meter box at her home in Marlinja.