Original media release from the Australian Competition and Consumer Commission (22/09/2023).
The ACCC has today instituted proceedings in the Federal Court against EnergyAustralia for allegedly breaching the Electricity Retail Code and the Australian Consumer Law when notifying its customers of impending price changes.
The Electricity Retail Code requires electricity retailers to communicate price information in a simple and standardised way, so consumers and small businesses can more easily compare plans across different energy companies.
“With electricity prices increasing, and many Australians looking for a better deal, it’s crucial that the information people receive from their energy company is correct and can be relied upon,” ACCC Chair Gina Cass-Gottlieb said.
“We have commenced this court action because we allege that EnergyAustralia’s conduct made it harder for people to accurately compare their electricity plan with offers from other retailers.”
The ACCC alleges that between June and September 2022, EnergyAustralia breached the Code by failing to state the ‘lowest possible price’ when sending price change notices to customers. 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 also alleges that EnergyAustralia made false or misleading representations in the estimates of annual costs that it provided to customers in price change notices, in breach of the Australian Consumer Law.
Between July and September 2022, EnergyAustralia published 27 electricity price offers advertised on its website. The ACCC alleges that EnergyAustralia breached the Code by failing to state the lowest possible price, as well as failing to state the percentage difference to the reference price, which is a benchmark price set by the government. Retailers are required to state the percentage difference between their offer and the reference price in consumer communications, in order to provide a consistent benchmark that enables consumers to compare price offers.
“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,” Ms Cass-Gottlieb said.
“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.”
The ACCC identified EnergyAustralia’s conduct through an audit of electricity retailers’ compliance with the Code. The ACCC regularly checks whether retailers are complying with the Code and is currently undertaking further audits of electricity retailers’ correspondence with customers and the offers advertised on their websites, as part of its 2023-2024 compliance program.
“It has now been more than four years since the Code was introduced, so there is really no excuse for retailers who do not have adequate programs in place to ensure they comply with their obligations under the Code,” Ms Cass-Gottlieb said.
The ACCC is seeking penalties and declarations, costs, and other orders.
EnergyAustralia is one of the ‘big three’ electricity retailers. As of Q1 2022/2023, it had approximately one million residential customers (15.1% market share) and 88,000 small business customers (13.6% market share).
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 that establishes enforceable requirements in relation to how electricity retailers must communicate pricing information to small customers.
Under the Electricity Retail Code electricity retailers must include certain information when communicating prices to allow consumers to easily compare offers and identify which offers in the market represent the best deal for them.
Since the Code was introduced in 2019, the ACCC has issued infringement notices to Locality Planning Energy, CovaU and ReAmped Energy for allegedly failing to include certain mandatory information when communicating prices. The ACCC has also accepted a court-enforceable undertaking from CovaU in response to likely breaches of the Code.
This is the first time the ACCC has commenced litigation in relation to an alleged breach of the Code.