Momentum Energy pays $54,000 penalty for 'misleading' renewable energy advertising

Momentum Energy has paid penalties totalling $54,000 following the issue of five infringement notices by the Australian Competition and Consumer Commission (ACCC), accusing the company of misrepresenting itself as a generator and supplier of renewable electricity during a recent advertising campaign.

From 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.

While Momentum is owned by Hydro Tasmania — a generator of hydroelectricity in Tasmania — the energy retailer also supplies its customers in Victoria, NSW, South Australia, Queensland and the ACT with electricity from the National Electricity Market (NEM). The NEM is a pool of electricity from a range of sources, including coal-fired generation; it is thus not possible for any retailer who supplies from the NEM to accurately claim that their electricity comes from one particular source, according to the ACCC.

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 on 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,” said ACCC Chairman Rod Sims. “By its advertising campaign, Momentum gave consumers the misleading impression that Momentum offered a renewable energy product, when this was not the case.

“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.”

The ACCC said it 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. It noted that the payment of a penalty specified in an infringement notice is not an admission of a contravention of the ACL.