Momentum Energy pays penalties of $54,000 in relation to renewable energy advertising

21 April 2016

Energy retailer Momentum Energy Pty Ltd (Momentum) has paid penalties totalling $54,000 following the issue of five infringement notices by the Australian Competition and Consumer Commission. Momentum is a retailer of gas and electricity in Victoria, NSW, South Australia, Queensland and the ACT.

The ACCC was concerned that an advertising campaign by Momentum, which included television, print, radio, social media and its website, represented that Momentum generated and supplied renewable electricity, when this is not the case.

From around September to December 2015, Momentum represented that it generated and supplied renewable electricity through phrases including “We generate energy out of thin air. And fresh water.” and “Powered by Hydro Tasmania, all our electricity is 100% Renewable”. Its television advertising also featured footage of a hydroelectricity dam.

Momentum is owned by Hydro Tasmania, a generator of hydroelectricity in Tasmania. However, like other energy retailers, Momentum supplies its customers in Victoria, NSW, South Australia, Queensland and the ACT with electricity from the National Electricity Market (NEM), sometimes referred to as the electricity grid. The NEM is 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.

Momentum also stated on its website 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”. However, purchasing electricity from Momentum had no direct effect upon the amount of renewable electricity which Hydro Tasmania supplied in the NEM.

“Although Momentum is owned by Hydro Tasmania, the electricity it supplies comes from the National Energy Market, not from hydroelectricity generated in Tasmania. By its advertising campaign, Momentum gave consumers the misleading impression that Momentum 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,” Mr Sims said.

The ACCC issued the infringement notices because it had reasonable grounds to believe that Momentum had contravened the Australian Consumer Law (ACL) by engaging in conduct liable to mislead the public as to the nature, manufacturing process and/or characteristics of its electricity products, in a television, print and radio advertising campaign, as well as through social media and on its website.

The payment of a penalty specified in an infringement notice is not an admission of a contravention of the ACL. The ACCC can issue an infringement notice where it has reasonable grounds to believe a person has contravened certain consumer protection laws.

Background

The GreenPower scheme only applies to new electricity generation capacity created after 1997.

Unlike the GreenPower scheme which was designed to encourage the development of renewable electricity sources, Smilepower did not encourage the development or use of new renewable electricity generation.

Most of Hydro Tasmania’s generation assets were online prior to 1997 so they do not produce the certificates that underpin the GreenPower scheme
 

Release number: 
MR 57/16
ACCC Infocentre: 

Use this form to make a general enquiry.

Media enquiries: 
Media team - 1300 138 917

Tags

Audience