Understanding prepay plans

Why do some people choose prepay?

Prepay electricity works like a mobile phone top-up. You pay in advance, the meter goes down based on what you use, and when your credit hits zero (or the minimum amount), the power supply stops until you top up again.

• Budget control: You decide when and how much to spend, lowering the risk of unexpected large bills.
• Better access: Prepay can support people who are unable to sign up for a power plan because of their credit situation.
• Flexible and simple setup: There’s no long-term contract, and you can usually get connected fast.
• Handy online tools and services: With many plans, you can monitor your real-time or daily usage and top up as you go.

What should you know before choosing prepay?

• Risk of disconnection: If you don’t top up in time, your power supply will stop.
• Potentially higher costs: Prepay customers may pay around 11-17% more than post-pay (when you pay at the end of the month).
• Terms and fees: Some power companies charge every time you top up, and might charge you to get the power back on if you've been disconnected.
• Limited access to time-specific rates: Prepay users often can’t access off-peak or time-of-use plans.
• Medically dependent consumers: If you or someone in your household relies on electricity for your health, power companies must not recommend prepay plans. If it is your only option, ask your power company to explain the risks so you understand them.

What are your rights and protections as a prepay customer?

Under the Electricity Authority’s Consumer Care Obligations, your power company must:

• Explain clearlyExternal Link, opens in a new tab the rates, fees, and differences between prepay and post-pay plans. 
• Give you a warning when your credit falls below what you'd usually use in two days, along with a recommendation to top up to avoid disconnection.   
• Make sure any disconnections are completed safely, and not during extreme weather, weekends, or public holidays. They must also make sure reconnections happen quickly and as soon as it is safe to do so.
• Not recommend a prepay plan if someone in your home depends on electricity for medical reasons. If you still choose one, they must guide you to safer options and explain any risks clearly. They must also encourage you to talk to a health provider or support agency first.

If you believe your power company has not met these obligations, you can contact Utilities DisputesExternal Link, opens in a new tab (0800 223 340), the free and independent dispute resolution service.