A carbon price commenced in Australia on 1 July 2012. The carbon price applies to certain greenhouse emissions, with some large businesses being required to purchase carbon credits against their emissions.
inform and educate businesses about their responsibilities under the Competition and Consumer Act 2010 when making carbon price claims, including by providing guidance.
raise awareness amongst consumers about their rights under the Australian Consumer Law (ACL).
investigate and, where appropriate, take action against businesses who engage in practices that contravene the ACL.
The ACCC does not have a role in formally monitoring, setting or restricting price increases linked to the carbon price and cannot prevent a business from putting up its prices as a result of the carbon price.
However, the ACCC can act against false, misleading or deceptive claims if a business falsely links a price rise with the carbon price.
Remember you can often get a better deal by asking questions and shopping around.
Look at what other businesses are charging for similar products and services, and see if they are saying different things about the impact of the carbon price, as you would with any price increase.
4. What are my rights as a domestic construction consumer?
The law says businesses must not make misleading or deceptive claims about the price of goods or services. This includes claims about the impact of the carbon price on the cost of building and construction goods and services.
If a residential building quote or contract, or even a discussion about prices links a price rise with the carbon price, the claim must be truthful and have a reasonable basis.
You have a right:
not to be misled by a business about the impact of the carbon price
to complain to the ACCC if you think you have been misled
to shop around.
There are state and territory laws that regulate residential building contracts. Some jurisdictions may allow construction businesses to include clauses in contracts that take into account increased costs. For more information contact your local Office of Fair Trading. Contact details are available at the Australian Consumer Law website.
I have been paying for green power/renewable energy, but now my provider has added a ‘carbon’ component to my energy bills. Is the energy retailer allowed to do this?
Energy customers may be paying an amount towards ‘renewable’ or ‘green’ energy through a range of different energy deals available. These deals generally involve customers paying an amount to support the production of electricity from green energy projects that then feed into the national electricity grid. It is impossible for only green energy to be transmitted directly to the homes and businesses of green energy customers. Pricing for green energy schemes is often accounted for separately on electricity bills.
While a green energy consumer supports the production of electricity from renewable sources, in effect, a green energy consumer is purchasing electricity drawn from the national electricity market, which includes electricity generated from green and other generation sources. Because the national electricity market has a single wholesale price that incorporates electricity from both renewable and non-renewable sources, the wholesale price will be affected by the carbon price. As such, the carbon price will increase a retailer's cost structure for all electricity purchased from the grid, including for green energy packages. Some retailers have decided to effectively absorb this cost while others have indicated that they will pass on the increase in cost to customers. Accordingly, consumers may wish to shop around for the price and conditions that suit.
Electricity generators in the eastern and southern coast of Australia sell electricity through a wholesale ‘pool’ market called the National Electricity Market or the NEM. Retailers bundle the cost of this wholesale electricity with the cost of network services for sale to residential consumers. Due to the nature of electricity, it is impossible for an end user in the NEM to only consume electricity sourced directly from a particular generator or particular generation type. In other words, all electricity is ‘pooled’ into the system, and customers draw upon this pool.
Many retailers offer green or renewable energy packages to consumers whereby a proportion of the electricity consumed by the customer is met by electricity from renewable energy sources. Most of these products are GreenPower accredited green power products (see www.greenpower.com.au). For each unit of GreenPower sold, an equivalent additional amount of renewable energy is generated and put into the pool. However, the renewable energy may be supplied to the pool at a different time to when the energy is used by the GreenPower customer. In other words, the retailer must still buy electricity on the NEM to ensure constant electricity supply to the customer.
The NEM has a single wholesale price that incorporates electricity from both renewable and non-renewable sources. This wholesale price will be affected by the carbon price and flows through to affect the cost of all retail electricity, including GreenPower electricity.
What is the ACCC doing about green energy claims and the carbon price?
The ACCC and the AER have reviewed information provided by electricity retailers about green energy claims. The information consistently indicates that the cost to retailers of supplying green energy packages would increase as a result of the carbon price. This increase is due to the increase in the cost of purchasing wholesale electricity from the NEM (which includes electricity generated from renewable sources) as the retailer has to purchase the energy consumed by the customer at the time the energy is consumed.
While all of the retailers have indicated that the carbon price will increase their cost structure for green energy packages, some retailers have decided to effectively absorb this cost while others have indicated that they will pass on the increase in cost to customers. Accordingly, consumers may wish to shop around for the price and conditions that suit.
Based on the information provided, the AER and the ACCC consider that, in certain circumstances, an increase in the price of green energy packages may be attributed to the carbon price without raising concerns under the Australian Consumer Law. The ACCC will, however, assess any complaints about representations made by retailers about future increases in the price of renewable energy packages attributed to the carbon price on a case by case basis.
The ACCC is unable to assist with individual billing disputes. If you still have concerns about the amount you are being billed for electricity, you should contact the Energy and Water Ombudsman in your state or territory.
