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Power generator and retailer EnergyAustralia has been fined $14 million by the Federal Court for duping hundreds of thousands of consumers about electricity prices in 2022 at a time when they were looking for a better deal due to increased power costs.
In the first court proceedings brought by the Australian Competition and Consumer Commission (ACCC) in relation to alleged breaches of the Electricity Retail Code since it was introduced in 2019, the court found that EnergyAustralia made false, misleading or deceptive statements to consumers and also failed to provide mandatory information required by the code.
The breaches occurred in communications sent between 20 June and 12 September 2022 to about 566,000 consumers regarding electricity prices.
EnergyAustralia, which has admitted the breaches, was found to have failed to state the lowest possible price in the communications and misrepresented the estimated annual price of its electricity offer for an “average” customer.
EnergyAustralia admitted that during this period it published 27 electricity offers online that did not meet the requirements of the Electricity Retail Code.
These requirements include the difference between the reference price and the unconditional price as a percentage of the reference price, as well as the lowest possible price. The reference price is used as a benchmark to compare market offer prices.
The ACCC says these offers were viewed about 220,000 times.
“EnergyAustralia breached laws which were designed to help consumers to compare electricity offers and identify the best deal by increasing transparency,” says ACCC chair Gina Cass-Gottlieb.
“EnergyAustralia’s failure to fully inform consumers meant they could not accurately compare offers from competing retailers and may have been denied the opportunity to choose the best deal for them.”
Cass-Gottlieb says some consumers may also have been misled by EnergyAustralia’s statements into thinking that a price change was less than it actually was. This may have led them to stay with their existing plan when a different plan may have been a better deal.
“This conduct occurred when electricity prices were rising and many consumers were looking to switch to cheaper plans,” she says.
“It is essential that electricity retailers provide consumers with accurate information so they can compare and access the most competitive prices in the market.
“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.”
The Federal Court also ordered EnergyAustralia to review its compliance program and pay a contribution to the ACCC’s costs.
Since the Code was introduced in 2019, the ACCC has issued infringement notices to electricity providers Locality Planning Energy, CovaU, ReAmped Energy and Dodo Power & Gas for allegedly failing to include mandatory information when communicating prices.
The ACCC has also accepted a court-enforceable undertaking from CovaU and Dodo in response to breaches of the code.
The ACCC says the action against EnergyAustralia represented the consumer authority's first court proceedings instigated in relation to alleged breaches of the Electricity Retail Code.
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