ACCC slams misleading energy campaign

Momentum Energy has paid $54,000 in penalties following the issue of five infringement notices by the Australian Competition and Consumer Commission (ACCC).

Momentum is a retailer of gas and electricity in Victoria, New South Wales, South Australia, Queensland, and the ACT. However, the ACCC said it was concerned a multi-media advertising campaign by Momentum was misleading, as it suggested the retailer generated and supplied renewable electricity.

Television, radio, print and social media marketing used phrases including, “we generate energy out of thin air”, and “Powered by Hydro Tasmania, all our electricity is 100 per cent renewable”. Momentum’s 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 with electricity from the National Electricity Market (NEM).

The energy retailer 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, the ACCC said purchasing electricity from Momentum had no direct effect upon the amount of renewable electricity, which Hydro Tasmania supplied in the NEM.

“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 that provide a financial incentive for new renewable electricity generation,” ACCC chairman Rod Sims said.

The ACCC’s Infringement Notice regime allows for alleged minor contraventions of Australian Consumer Law to be dealt with expeditiously. However, paying the infringement notices did not constitute an admission by Momentum to a breach of consumer law.

Hydro Tasmania CEO Steve Davy said under the current circumstances, and with energy supply in Tasmania the number one priority, the business had chosen to comply with the infringement notices.

“Momentum believed strongly its customers were entitled to know it is part of Australia’s largest renewable energy business. The advertising campaign in question was based around this proposition,” he said.

“On occasion people will have different opinions about what advertising conveys. We have now addressed those aspects of the campaign that may have caused confusion.

“While we are disappointed with the outcome, Hydro Tasmania remains committed to the Momentum Energy business and values the role it plays in supporting renewable energy, with its profits returning to Tasmania.”

All material relating to the original Momentum campaign has been withdrawn or removed.