While the ACCC has issued infringement notices for breaches of the Electricity Retail Code, this action is the first time court proceedings have been brought under it. Image: EnergyAustralia.
The Federal Court has slapped EnergyAustralia – one of the nation’s ”big three” energy retailers – with a $14 million fine for making deceptive statements about electricity prices and failing to provide information required by the .
EnergyAustralia’s conduct was discovered by the Australian Competition and Consumer Commission (ACCC) during its regular compliance checks. This led to the regulator launching proceedings against the retailer for alleged breaches of the code and the Australian Consumer Law in September last year.
A year later, the company has admitted to the breaches found in its communications to about 566,000 customers between 20 June and 12 September, 2022.
ACCC chair Gina Cass-Gottlieb said the energy retailer had breached laws designed to help consumers identify the best deal at a time when electricity prices were rising and many were looking to switch to cheaper plans.
“Some consumers may also have been misled by EnergyAustralia’s statements into thinking that a price change was less than it actually was, causing them to stay with their existing plan when in fact a different plan may have represented a better deal,” she said.
“This enforcement action is a reminder that the ACCC is closely monitoring the electricity market, conducting regular compliance checks and ready to take strong action when appropriate.”
EnergyAustralia not only misrepresented the estimated annual price of its electricity offer to an ”average” customer, it failed to state the lowest possible price.
It also admitted to publishing 27 electricity offers online that failed to state the difference between the reference price and unconditional price, or the ”lowest possible price”. These offers were viewed about 220,000 times.
The ‘’reference price’’ is the per-customer annual price based on the Default Market Offer determined by the Australian Energy Regulator. It is used as a benchmark to compare market offer prices.
However, the ‘’lowest possible price’’ is the total amount a representative customer would be charged for the supply of electricity in the financial year at the offered prices, assuming that all conditional discounts (if any) are met. If there are no conditional discounts, the lowest possible price is the same as the unconditional price.
Along with the $14 million fine, the Federal Court has ordered EnergyAustralia to review its compliance program and pay a contribution to the ACCC’s costs.
The regulator offers its own site for comparing electricity plan information, but has also recommended two other tools in Energy Made Easy and Victorian Energy Compare.
It was about 10 years ago that EnergyAustralia received its last two fines in proceedings brought by the ACCC.
The Federal Court imposed a $1.2 million penalty in April 2014, followed by a $1 million penalty in March 2015. Both were in relation to making false or misleading representations about offerings to consumers.
As for this most recent breach, the energy retailer has apologised to those affected, who were mainly residential and small-business customers.
“We acknowledge this $14 million penalty reflects the seriousness of the failure in our duty to provide clear and accurate information to customers,” managing director Mark Colette said.
“We are sincerely sorry. Once we became aware of the issue, we took immediate action. We sought to contact every customer impacted by this issue, as well as reviewed our pricing processes and customer communication.
”We have made significant improvements to our governance. We are continually investing in systems to uplift our customers’ experience.”
EnergyAustralia said any customer with remaining concerns could contact its customer care team.
