Watchdog fines Powershop for discriminating against solar customers

Powershop has been fined $300,000 for allegedly discriminating against solar customers in Victoria, after the state’s Essential Services Commission found the energy retailer, under its Kogan Energy brand, had offered cheaper tariffs exclusively to non-solar customers.

The ESC said it issued the retailer with 15 penalty notices after it found Kogan Energy Market Offers had offered lower tariffs to non-solar customers, only, over a period between September 10, 2019, and 7 April 2020.

The Commission heard that solar customers could only access the tariffs under the Kogan Energy Solar Market Offers, which were the found to be more expensive, creating an average monetary disadvantage of $25.13, with the highest discrepancy being $302.53.

Commission chair Kate Symons said treating rooftop solar customers differently to non-solar customers was a clear contravention of Victoria’s Electricity Industry Act 2000. The decision to fine Powershop, she said, sent a strong message that solar discrimination would not be tolerated.

“Rooftop solar panels now contribute almost a third of the state’s residential electricity demand and are a vital part of Victoria’s future energy mix,” Symons said, adding that retailers should support the transition and not put obstacles in the way.

Symons also noted, however, that the Commission had taken into account Powershop’s timely co-operation on the matter and its “acknowledgement of wrongdoing” in keeping the number of penalty notices to 15.

The allegations are a blow to the Meridian Energy-owned Powershop, which arrived on the scene in Australia in the mid 2010s to disrupt an industry notoriously low on trust and customer loyalty with an online energy retailing model based on customer engagement and operational transparency.

A partnership with online retailer Kogan was announced by Meridian in June 2019, to offer “competitive power and gas services” to Australian households, with Powershop to supply energy and retail services while Kogan would be responsible for sales and marketing.

In an emailed statement to One Step Off The Grid on Wednesday, Powershop Australia CEO Jason Stein said that entire team at the online retailer was “gutted” to have made the tariff “mistake,” which the company had itself reported to the ESC and to customers.

“We unreservedly apologise to our 161 customers that were impacted by this failure on our part and more broadly to our customers who will be disappointed to learn of these penalty notices,” Stein said.

“The whole team is honestly gutted … as it is absolutely not within our DNA, culture or our approach to business to negatively impact customers or to contravene industry regulations.

“We’ve always been committed to our solar customers and supporting them to take advantage of their solar generation through the insights in our app and online tools. We also work closely with partners to support the uptake of solar and battery installation and our solar installation advisory service Better Solar.”

Stein said the company had since put “new processes and resources in place” to ensure mistakes like this would not be repeated in the future.

“We are an original signatory of the Energy Charter (which was created to put customers at the center of the energy sector) we actively partake in customer, environmental and industry advocacy and we have a fantastic team who work hard for what is right every single day,” Stein added.

“We know all too well that customer trust is hard to gain and we are committed to ensuring mistakes of this nature do not occur again.”