Momentum fined for misleading consumers on renewable electricity

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.

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.”