The company admitted it failed to clearly state required info in its price change communications
The Federal Court ordered EnergyAustralia to pay $14 million in penalties for breaching consumer laws by misrepresenting electricity pricing information to its customers.
The electricity company admitted to breaching the Australian Consumer Law (ACL) and the Competition and Consumer Act 2010 (Cth) (CCA). The breaches stemmed from the company's failure to provide accurate information about electricity pricing to approximately 566,000 “small customers” through price change communications and its website.
The Australian Competition and Consumer Commission (ACCC) initiated the proceedings, alleging that EnergyAustralia had violated key provisions of the Competition and Consumer (Industry Code—Electricity Retail) Regulations 2019 by failing to display the "lowest possible price" for its electricity offers. The court found that EnergyAustralia's communications misrepresented the estimated annual price for small customers, using a reference price instead of the correct price based on specific customer characteristics.
EnergyAustralia's contraventions occurred between June and September 2022, during a period of volatility in the national electricity market. The company admitted that it did not clearly state the required information in its price change communications and website offers. The breaches involved misrepresentations regarding the difference between the reference price and the unconditional price and the lowest possible price that customers could pay.
The ACCC and EnergyAustralia reached a settlement, agreeing to penalties totaling $14 million—$10 million for misleading price change communications and $4 million for similar breaches on the company's website. The court approved the penalties, emphasizing the importance of deterrence and the need for businesses to ensure compliance with industry regulations and consumer protection laws.
The Federal Court found that EnergyAustralia's misleading communications likely caused harm to consumers, denying them the opportunity to make informed decisions based on accurate pricing information. Some customers may have chosen less favourable electricity plans or changed their usage based on incorrect estimates. EnergyAustralia has since contacted affected customers and issued correction letters to address the pricing errors.
In response to the ACCC's concerns, EnergyAustralia has implemented several compliance measures, including revising its processes for creating and reviewing price change communications and enhancing oversight of its website offers. The company also committed to reviewing its compliance program annually for the next three years.
