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Bombshell claim against major power retailer

BUDGET GENERICS
EnergyAustralia has been taken to court by the ACCC over allegations they breached the Electricity Retail Code and the Australian Consumer Law when notifying its customers of impending price changes.

One of Australia’s biggest energy retailers has formally apologised to customers after the corporate watchdog launched legal proceedings against it, alleging the company misled customers about the prices of their electricity plans.

The Australian Competition and Consumer Watchdog (ACCC) announced on Friday they had lodged proceedings against EnergyAustralia in the Federal Court, citing alleged breaches of consumer law and Australia’s Electricity Retail Code.

EnergyAustralia is one of the country’s biggest electricity retailers, boasting almost 15 per cent of the market share of residential customers.

ACCC ROD SIMS SPEECH
ACCC chair Gina Cass-Gottlieb announced the watchdog had initiated proceedings in the Federal Court against major power retailer EnergyAustralia. Picture: NCA NewsWire / Christian Gilles

The ACCC alleges between June and September last year, EnergyAustralia failed to state the lowest possible price when sending price change notices to their customers.

The watchdog claims this constitutes a breach of the Electricity Retail Code.

“The lowest possible price is a mandatory estimate of the amount a representative customer would be charged in a year, based on model usage and assuming the conditions attached to any discounts will be met,” the ACCC said in a statement.

They further allege EnergyAustralia made “false or misleading representations” in estimates of annual costs provided to customers in their price change notices.

Of the 27 price offers advertised on the company’s website around the same time last year, the ACCC alleges EnergyAustralia did not state the lowest possible price and the percentage differences to the reference price.

“Correspondence from energy companies often contains complex information that is hard for consumers to decipher, which is precisely the problem that the Electricity Retail Code was introduced to deal with,” ACCC chair Gina Cass-Gottlieb said.

“We allege that EnergyAustralia’s conduct made it harder for people to accurately compare their electricity plan with offers from other retailers.

“Households cannot do genuine like-for-like comparisons between different electricity plans unless every energy company complies with the Code requirements on price offers. Non-compliance, particularly by a large company, can distort the process of shopping around for the best deal.”

BUDGET GENERICS
EnergyAustralia formally apologised to customers on Friday and promised to improve its communications moving forward to comply with regulations. Picture: NCA NewsWire / Martin Ollman

EnergyAustralia chief customer officer Mark Brownfield apologised on Friday and said the retailer would improve its communications so retail and small business customers could “easily compare” electricity and gas offers and make informed decisions.

“We understand the clarity of our customer communication is particularly important at a time when cost of living pressures are a key concern for Australian households,” he said.

“On behalf of EnergyAustralia, I apologise to our customers.

“We have been open with the ACCC on the issues they identified and the importance we attach to clear, transparent communications to our customers.

“We want to confirm the fundamental importance EnergyAustralia attaches to regulatory compliance in every aspect of our operations.

“We have already prioritised the completion of our program of improvements to customer communications to ensure our customers have the information they need to make informed decisions.”