EnergyAustralia clears air about green electricity claims

21 December 2007

EnergyAustralia has agreed to provide the Australian Competition and Consumer Commission with an administrative undertaking to resolve ACCC concerns about representations which it made about its ClearAir and GreenFuture non-accredited electricity products, ACCC Chairman, Mr Graeme Samuel, announced today. 

"EnergyAustralia has agreed to the administrative undertaking without admission that their conduct constituted a contravention of the Trade Practices Act."

The ACCC investigated EnergyAustralia's claims after a complaint was received from the Total Environment Centre. The TEC was concerned that EnergyAustralia was making representations on its website and in promotional material that its ClearAir and GreenFuture products would provide '100% green electricity at no extra cost' and '100% renewable energy'. A related representation was that 'for every kilowatt hour of electricity you buy, the same amount of electricity will be generated from 100% renewable sources, and that’s guaranteed'.

Whilst EnergyAustralia withdrew the products from the market in 2006, the ACCC was concerned that Energy Australia's representations may have led consumers to believe that by signing up to the non-accredited ClearAir and GreenFuture products, they would be making equal or similar contributions to renewable energy generation as accredited renewable energy products when this was not the case. 

The ACCC was also concerned that consumers may have believed that one environmental benefit of opting to receive these products was that less electricity would be generated from fossil fuels when in reality EnergyAustralia was acquiring renewable energy credits from existing rather than new renewable energy generation.

Whilst EnergyAustralia has not admitted that its conduct constituted a contravention of the Act, it has acknowledged that its representations may have confused some consumers.  Accordingly, Energy Australia has agreed to a range of measures to reduce the level of confusion in the market:

  • to write to existing customers who were formerly ClearAir and GreenFuture customers to fully explain the differences between non-accredited and fully accredited 100% GreenPower products and provide a clear explanation of the environmental benefits of each product, and
  • provide $100,000 towards an educational brochure for national distribution to be published by an appropriate environmental organisation explaining the differences between accredited and non-accredited renewable energy products and provide a clear explanation of their environmental benefits.

EnergyAustralia has also agreed to provide all former ClearAir customers with the benefits of PureEnergy Premium (an accredited 100% GreenPower energy product) applied to their current quarterly bill.  In this way these customers will get the benefit of a 100% accredited renewable energy product for one quarter as a form of redress. The total financial value of this benefit to these consumers is approximately $500,000.

EnergyAustralia has also agreed to conduct a review of its existing trade practices law compliance program in the light of the issues raised in the investigation.

"It is well known that consumers are becoming more and more concerned about whether the products they buy have environmental benefits," Mr Samuel said. "Indeed it is becoming increasingly apparent that a decisive factor for many consumers in making their purchasing decisions will be whether the product in fact delivers these benefits.

"Given the increasing importance of environmental issues to consumers, it is incumbent on suppliers of purportedly environmentally friendly or green products to ensure that any representations which they make about the environmental benefits of their products are clearly expressed and easily understood as well as being accurate. This is particularly important where the product offering is more complex as is arguably the case with accredited and non-accredited green electricity products.

"In the current matter, the ACCC hopes that the steps being undertaken by EnergyAustralia to fund the educational brochure and to write to former ClearAir and GreenFuture customers will go some way to removing the confusion about accredited and non-accredited products which appears to exist in the market. Furthermore these initiatives may also go some way to educating consumers about the superior environmental benefits of accredited products."

Release number: 
MR 356/07
ACCC Infocentre: 

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Mr Graeme Samuel - (03) 9290 1812
Ms Lin Enright - (02) 6243 1108