The Federal Court has ordered EnergyAustralia to pay $14 million in penalties for making false, misleading or deceptive statements to hundreds of thousands of consumers about electricity prices, and failing to provide mandatory information required by the Electricity Retail Code (the Code).
EnergyAustralia admitted it had breached the Australian Consumer Law and the Code in its communications sent between 20 June and 12 September 2022 to around 566,000 consumers about electricity prices, by failing to state the lowest possible price in the communications and misrepresenting the estimated annual price of its electricity offer for an "average" customer.
In addition, Energy Australia admitted, that between 1 July and 27 September 2022, it published 27 electricity offers online that failed to state the difference between the reference price and the unconditional price expressed as a percentage of the reference price, or the 'lowest possible price' as required under the Code. 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," ACCC Chair Gina Cass-Gottlieb said.
"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."
"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," Ms Cass-Gottlieb said.
This conduct occurred when electricity prices were rising and many consumers were looking to switch to cheaper plans.
"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," Ms Cass-Gottlieb said.
The Court also ordered EnergyAustralia to review its compliance program and pay a contribution to the ACCC's costs.
Note
The Electricity Retail Code applies to all electricity retailers that supply electricity to residential and small business customers in applicable distribution regions in New South Wales, South Australia, and South-East Queensland. It is a mandatory industry code under the Competition and Consumer Act and establishes enforceable requirements in relation to how electricity retailers must communicate pricing information to small customers. It was introduced to increase transparency in the retail electricity market and allow consumers to easily compare offers against a common benchmark. Under the Code, electricity retailers must include certain information when communicating prices. 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 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.
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.)
Since the Code was introduced in 2019, the ACCC has issued infringement notices to Locality Planning Energy, CovaU, ReAmped Energy and Dodo Power & Gas for allegedly failing to include certain 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 proceedings against Energy Australia were the first court proceedings brought by the ACCC in relation to alleged breaches of the Code.
Consumers can compare electricity plan information on the Government comparison website Energy Made Easy and Victorian Energy Compare. For further information for consumers on comparing energy plans, see the ACCC website.
Background
EnergyAustralia is one of the 'big three' energy retailers.
In September 2023, the ACCC commenced proceedings against EnergyAustralia in relation to these alleged breaches of the Code and the Australian Consumer Law.
EnergyAustralia's conduct was identified by the ACCC's regular compliance checks of electricity retailer's compliance with the Code.
Previously, in April 2014, the Federal Court imposed a $1.2 million penalty on EnergyAustralia for making false and misleading representations and engaging in misleading and deceptive conduct while calling on consumers at their homes to negotiate agreements for the supply of retail electricity, in proceedings brought by the ACCC.
In March 2015, the Federal Court also ordered EnergyAustralia to pay a $1 million penalty for making false or misleading representations and engaging in misleading or deceptive conduct when dealing with certain consumers to sell electricity and gas plans, in proceedings brought by the ACCC.
