Momentum fined for misleading consumers on renewable electricity | RenewEconomy

Momentum fined for misleading consumers on renewable electricity

Hydro Tasmania-owned electricity retailer pays $54,000 in ACCC fines for misleading consumers about the source – and colour – of its electricity.

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Claims from Australian power retailer Momentum Energy that the electricity it supplied customers was “100 per cent renewable” have cost the  company more than $50,000 in fines, after the Australian Competition and Consumer Commission found them to be misleading.

Momentum said in a statement on Thursday that it had paid five infringement notices issued by the ACCC, totalling $54 000, in relation its late-2015 advertising campaign linking the electricity produced by its parent company, Hydro Tasmania, with the electricity it sold on mainland Australia.

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According to the ACCC, the advertising campaign – which ran from September through to December last year, in print and on television, radio, social media and online – represented that Momentum supplied renewable electricity generated “out of thin air” and “fresh water” by Hydro Tasmania.

But the ACCC said that this was misleading and inaccurate.

“Like other energy retailers, Momentum supplies its customers in Victoria, NSW, South Australia, Queensland and the ACT with electricity from the National Electricity Market… a pool of electricity from a range of sources including coal-fired generation.

“For this reason, it is not possible for any retailer who supplies from the NEM to accurately claim that their electricity comes from one particular source,” it said in a statement.

The ACCC also took issue with Momentum’s website claims 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”.

Although owned by Hydro Tasmania, the ACCC said, “the electricity (Momentum) supplies comes from the National Energy Market, not from hydroelectricity generated in Tasmania. By its advertising campaign, Momentum gave consumers the misleading impression that (it) 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,” he said.

For its part, Hydro Tasmania has paid the fines, apologised for any confusion the campaign may have caused, and taken action internally to ensure this is not repeated.

But CEO Steve Davy – who is no doubt still heavily preoccupied by the ongoing Tasmanian electricity crisis, and the growing amount of diesel generation that he has to rely on – has stressed that paying the infringement notices does not constitute an admission by Momentum to a breach of consumer law.

“Momentum believed strongly that its customers were entitled to know it is part of Australia’s largest renewable energy business. The advertising campaign in question was based around this proposition,” Davy said in a statement.

“On occasion people will have different opinions about what advertising conveys. We have now addressed those aspects of the campaign that may have caused confusion.

“Hydro Tasmania has reviewed its controls around advertising and marketing for all its businesses. New guidelines are also being developed for future advertising campaigns carried out by Momentum.

“While we are disappointed with the outcome, Hydro Tasmania remains committed to the Momentum Energy business and values the role it plays in supporting renewable energy, with its profits returning to Tasmania.

“We also remain committed to clear communications with our customers and consumers concerning our business.”

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8 Comments
  1. Andrea 5 years ago

    So is Powershop (and the NGOs spruiking it) getting investigated too? https://www.greenleft.org.au/node/59691

  2. Mic Wells 5 years ago

    The ACCC is being selective in its attack. GreenPower has no more justification for its Marketing Guidelines which imply the same customer impression and direct customers to claim reduced emissions. The truth is, until there is reform to legally allocate renewable attributes to any kind of renewable paying customer, the entire system is double counted and lacks integrity. This complete failure of a legislative and allocation framework to support retail renewable sales extends to all renewable products including GreenPower, voluntary surrender of Large Scale Certificates, Smilepower and any other power purchase agreement for lower emissions electricity. The ACCC has been made aware of the legal short comings for near a decade and has blocked reform and transparency.
    If Momentum are fined for selling renewables that cannot be sold then all GreenPower retailers should also be fined where they make reference to flawed GreenPower Marketing Guidelines.
    How about ACCC start to work to fix the frameworks so we can have a low carbon economy with retail renewables that work.

    • Jon 5 years ago

      The article seems to suggest that they were potentially marketing Black energy as Green, because their parent generates only green energy. This might mean that consumers would believe they were getting green energy just because they buy from momentum. If the customers were in fact buying Green energy products then I can’t see any issue.

      • Mic Wells 5 years ago

        The key issue is that under the current National Greenhouse and Energy Reporting Legislation and Framework, RET legislation and the NEM, there is no such thing as a green energy product for consumers. Every consumer gets a grid average allocation of use and emissions.

        Some have argued that Australia’s National Greenhouse and Energy Legislation does not provide any legal allocation to any customer, in which case no end user can claim anything, there are no green energy products, or there are just no rules. Either way, the ACCC is out of line penalising Momentum whilst turning a blind eye to GreenPower, Voluntary surrender of Large Scale Certiicates, and all the businesses and Governments claiming the purchase of renewables and the complete failure to have an allocation system that would enable end users to buy and use renewables in allocation.

        Chapter 7 Sect 7.2 of the NGER Determination states: “EF is the scope 2 emission factor, in kilograms of CO2‑e emissions per kilowatt hour, for the State or Territory in which the consumption occurs as mentioned in Part 6 of Schedule 1.Note: There is no other method for this section”.

  3. Jon 5 years ago

    Next stop for ACCC – Powershop!

  4. Ian Wentworth 5 years ago

    I am confused by the reported response of the ACCC.
    Is the underlying problem, and reason for the fine…
    1. That Momentum’s hydro is renewable but not accredited green as it was built before 1997?
    or 2. That Momentum sells more renewable via the NEM than it actually supplies over the relevant accounting period?
    or 3. That Momentum is supposedly conveying the impression that retail customers are instantaneously utilising renewable energy directly and wholly from Tasmanian hydro?
    If point 3 is the case, then the comment by Mic Wells which implies on this basis there can be no green product marketed by any retailer appears valid.
    It may have been helpful if the article had brought this aspect into focus, rather than leaving the impression simply that Momentum was being deliberately misleading for commercial gain.

    • Sam0077 5 years ago

      Should be that Momentum shouldn’t be existing as most here in Tassie wont have heard of them until now. Finding out lots of things going on that we didnt know all to do with those in power ripping off the majority. And getting away with it. Media only reports mainly because Liberals in government now but it was Labor Greens who have done the damage as usual. Yet like Shorten they deny it was them. Even had Senate enquiry terms were fault of this Minister nothing re flogging off for cash they pocketed mainly between themselves one way or another. Bonuses for managements at these so called Business enterprises which are P/L but act like owner operated.
      Really seems talk is only cheap thing going today. Action to stop it non existent.

  5. Sam0077 5 years ago

    I live in Tassie didn’t even know this company existed but hearing now of Labor selling off our power to mainland using up our reserves of water for cash as prices higher on mainland. Now we are paying dearly for it whilst they blame current Liberal Government. Hypocrite Green Nick McKim actually saying Minister responsible for power crisis when Greens stopped damning the Franklin river (and other dams in Australia )- needed badly for power and because shortages of water in drought years. Not forgetting scientists told us back in mid 20th century 12million was total water sustainability for this dry continent with arable land used for food for rest of world. Coming home to roost. But whilst they politic – nothing happens to those who not only are responsible for workings of the Hydro all 3 parts all overpaid and paying themselves bonuses for sacking front line troops for savings out of proceeds of flogging off our reserves for cash, but also using what we own as a cash cow for their own needs and told employing their own families – getting around it by you take this one of mine and I’ll take yours even reported in state government across the parties.
    Who are the mugs today?
    Must be all of us voters as we just keep on voting back same lot whose nests have to be well feathered by now – whilst ours are looking thinner daily as taxes prices and all go up to pay for those in the inner circles of wealth.
    Just read Public servants some get 100% salary sacrifice too. Meaning they produce nothing for the taxpayers by way of even their personal income tax unlike a company there they produce company taxes as well as for workers. Well those on PAYG – others – again offshore accounts, trusts, and loopholes galore as incomes not reported. And notice how slow even Labor 6 years did nothing now shouting about to do. Royal commissions – no one gets even more than rap on wrist.
    No wonder so many are cynical.

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