EnergyAustralia has announced that it has recommitted to improving its customer communications in an effort to better comply with regulations, after the Australian Competition and Consumer Commission (ACCC) commenced legal proceedings in the Federal Court regarding its compliance to sharing electricity price information.
The ACCC legal proceedings concern EnergyAustralia’s compliance with the Competition and Consumer (Industry Code – Electricity Retail) Regulations 2019, particularly the period between 20 June 2022 to 28 September 2022.
The ACCC is questioning the adequacy of EnergyAustralia’s communications to its retail and small business customers allowing them to easily compare electricity and gas offers and make well-informed decisions.
This includes information on EnergyAustralia’s website, plans and other communications including how prices were presented with respect to the reference price.
ACCC Chair, Gina Cass-Gottlieb, said, “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.”
“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.”
EnergyAustralia Chief Customer Officer, Mark Brownfield, said that EnergyAustralia understands the clarity of its customer communication is particularly important at a time when cost of living pressures are a key concern for Australian households.
“On behalf of EnergyAustralia, I apologise to our customers,” Mr Brownfield said.
“We have been open with the ACCC on the issues they identified and the importance we attach to clear, transparent communications to our customers.
“We want to confirm the fundamental importance EnergyAustralia attaches to regulatory compliance in every aspect of our operations.
“We have already prioritised the completion of our program of improvements to customer communications to ensure our customers have the information they need to make informed decisions.”
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.”