Energy retailer pays up over 'misleading' renewables advertising

Energy retailer Momentum Energy has agreed to pay $54,000 following five infringement notices issued by the Australian Competition and Consumer Commission (ACCC), after the consumer watchdog argued one of Momentum’s advertising campaigns gave misleading information to consumers about how it supplied renewable energy.

The campaign, which ran over television, print, radio, social media and its website from around September to December 2015, implied the company generated and supplied renewable electricity through phrases such as “We generate energy out of thin air. And fresh water” and “Powered by Hydro Tasmania, all our electricity is 100% Renewable” with television footage of a hydroelectricity dam.

While Momentum is owned by Hydro Tasmania — a generator of hydroelectricity in Tasmania — like other energy retailers, Momentum also supplies its customers in Victoria, NSW, South Australia, Queensland and the ACT with electricity from the National Electricity Market (NEM).  

For this reason, the ACCC said it is not possible for any retailer who supplies from the NEM, which is a pool of electricity from a range of sources including coal-fired generation, to accurately claim that their electricity comes from one particular source.

The ACCC said Momentum also stated on its website that “for every bit of power you use, the equivalent amount of renewable energy is fed directly into the National Electricity Market by our parent company, Hydro Tasmania”; however, purchasing electricity from Momentum had no direct effect upon the amount of renewable electricity which Hydro Tasmania supplied in the NEM.

“Although Momentum is owned by Hydro Tasmania, the electricity it supplies comes from the National Energy Market, not from hydroelectricity generated in Tasmania. By its advertising campaign, Momentum gave consumers the misleading impression that Momentum offered a renewable energy product, when this was not the case,” ACCC Chairman Rod Sims said.

“These sorts of claims may mislead consumers to buy a product thinking it is a ‘greener’ option than it really is. Such conduct not only harms consumers but also disadvantages competitors who may, for example, offer accredited GreenPower plans which provide a financial incentive for new renewable electricity generation.”

The ACCC said it issued the infringement notices because it had reasonable grounds to believe that Momentum had contravened the Australian Consumer Law (ACL) by engaging in conduct liable to mislead the public as to the nature, manufacturing process and/or characteristics of its electricity products in a television, print and radio advertising campaign, as well as through social media and on its website.

The payment of a penalty specified in an infringement notice is not an admission of a contravention of the ACL. The ACCC said it can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.

Originally published here.