Momentum Energy, which supplies gas and electricity to homes across New South Wales, Victoria, South Australia, Queensland and the ACT, has paid penalties totalling $54,000 following the issue of five infringement notices by the Australian Competition and Consumer Commission (ACCC).
The consumer watchdog was concerned that an advertising campaign by Momentum, which included television, print, radio, social media and its website, represented that the energy retailer generated and supplied renewable electricity, when this is not the case.
The ACCC says that from September to December 2015, Momentum claimed 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.
When green energy is not green energy
Momentum is owned by Hydro Tasmania, but like other energy retailers, it supplies its customers in Victoria, NSW, South Australia, Queensland and the ACT with electricity from the National Electricity Market (NEM), also known 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,” the ACCC explained.
Momentum also claimed 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.
ACCC Chairman Rod Sims claimed consumers could have been misled. He said: “By its advertising campaign, Momentum gave consumers the misleading impression that it offered a renewable energy product, when this was not the case.
“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 GreenPower scheme only applies to new electricity generation capacity created after 1997. Most of Hydro Tasmania’s generation assets were online prior to that date, so do not produce the certificates that underpin the GreenPower scheme.
Despite that, Momentum Energy was ranked third in the 2015 Green Electricity Guide by Greenpeace Australia and the Total Environment Centre.
Momentum also topped Canstar Blue’s customer satisfaction ratings for electricity providers in Victoria in 2014 – a title now held by Powershop.
The CEO of Hydro Tasmania, Steve Davy, responded to the ACCC’s finding by saying the company apologised for “any confusion the campaign may have caused” and had taken action internally to ensure it was not repeated.
“Momentum believed strongly that 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. We also remain committed to clear communications with our customers and consumers concerning our business.”
All materials relating to the original Momentum campaign have been withdrawn or removed, the company says.