The Australian Competition and Consumer Commission (ACCC) has brought its first enforcement action for a failure to comply with a standing order price cap, issuing six infringement notices to M2 Energy Pty Ltd, trading as Dodo Power & Gas (Dodo). Dodo has paid a $82,500 penalty for contraventions of the Electricity Retail Code of Conduct (the Code) in the Competition and Consumer (Industry Code – Electricity Retail) Regulations 2019.
What is the Code?
The Code is prescribed under the Competition and Consumer Act 2010 (Cth) and applies to all retailers that supply electricity to households and small usage businesses in New South Wales, South Australia and South-East Queensland.
The Code was introduced in response to the 2018 Retail Electricity Pricing Inquiry, which found that consumers who were inactive or disengaged from the market were charged unreasonably high standing offer prices. The inquiry also found that the marketing of retail offers made it difficult for consumers to effectively compare options.
The purposes of the Code include limiting the standing offer prices that are charged to residential and small business consumers and setting standards on how prices and discounts must be advertised, published and offered. The ACCC enforces the Code through regular compliance checks and investigations of alleged breaches.
What’s in the ACCC’s enforcement action?
In the infringement notice, the ACCC alleged that:
- from 1 July 2022 until 31 May 2023 inclusive, Dodo priced two of its standing offers above the relevant price cap for that day;
- from 6 June 2023 to 22 June 2023 inclusive, Dodo sent price change communications to 52,014 small customers that did not contain the information required by s 12(3)(a), (b) and (c) of the Code, including the percentage difference between the reference price and the unconditional price; the percentage difference between the unconditional price and the conditional price for the discount; and the lowest possible price; and
- Dodo did not make a record of how it calculated or estimated required matters in the Code in relation to the offered prices.
In response to ACCC’s action, Dodo admitted to all three allegations, paid the relevant infringement notice penalty, and provided an enforceable undertaking order under Section 87B of the Competition and Consumer Act 2010 (Cth). The undertaking includes commitments to:
- ensure the prices on Dodo’s standing offers are subject to requirements set out by the Code and comply with the price cap on that day;
- state all matters required by the Code when communicating offered prices to small customers;
- keep appropriate records of how it calculated or estimated the matters mentioned in s 12(3)(a), (b) and (c) of the Code; and
- establish and implement a Competition and Consumer Compliance Program.
Looking forward: What does this mean for electricity retailers?
The enforcement action against Dodo is the first by the ACCC for a failure to ensure standing offers comply with the price cap and is reflective of broader ACCC priorities highlighted in the ACCC’s 2024-25 Compliance and Enforcement Policy and Priorities, including the net zero transition, ongoing digital transformation, and the impact of cost-of-living pressures. In respect of the latter, the ACCC acknowledges price increases for electricity for residential customers across all regions (by 14% from September 2022 to September 2023), and the need for greater scrutiny of essential services. The ACCC continues to closely monitor the energy sector and take enforcement action where warranted. In that context, electricity retailers should remain focused on ensuring that they comply with the Code.
Further information: A guide to compliance
The ACCC has published a Guide to the Electricity Retail Code (the Guide) which provides a thorough breakdown of requirements under the Code. The Guide includes how to check if retailers are compliant with price caps, what retailers must communicate to consumers to ensure compliance and more. The Guide can be accessed here.
For further details or assistance navigating the risks and ensuring compliance in relation to renewable energy, competition and consumer law, please contact Matt Baumgurtel and Alistair Newton.
