Five energy retailers pay a combined $1 million in penalties after allegedly failing to meet energy efficiency liabilities

Five energy retailers have paid a combined total of almost $1 million in penalties for allegedly failing to meet legal obligations in place as part of the Victorian Energy Upgrades program.

Click Energy, Red Energy, Lumo Energy, M2 Energy and Weston Energy paid the penalties after allegedly failing to surrender the required number of Victorian energy efficiency certificates to offset their legislative liability under the program in 2021.

The Victorian Energy Upgrades (VEU) program provides valuable economic and environmental benefits to Victorians. It assists households and small businesses to reduce their energy bills and greenhouse gas emissions by providing access to discounted energy efficient products and services.

The program is funded by energy retailers which are required to surrender Victorian energy efficiency certificates in proportion to the volume of electricity and gas they sell each year.

Most energy retailers met their liability under the program in 2021 with more than 6.5 million certificates being surrendered to offset emissions generated by energy sales.

The Essential Services Commission regulates the program and issued the shortfall penalty statements after identifying liability shortfalls ranging from 164 to 7,355 energy efficiency certificates per retailer.

The shortfalls were picked up by the commission in its review. The commission is satisfied that these shortfalls were genuine auditing errors rather than fraudulent behaviour.

Acting Commission Chairperson Sitesh Bhojani said the VEU program is an important contributor to the state’s legislated goal to reach net zero emissions by 2050.

“This program is vital to Victoria’s push to cut greenhouse gas emissions. The legislation is clear that energy retailers operating in our state must do their bit to reduce greenhouse gas emissions,” said Acting Chairperson Bhojani.

“The commission’s decision to issue these shortfall penalties is a reminder to the sector of its obligations to contribute to critical emissions reduction initiatives that benefit all Victorians.”

The Victorian Energy Upgrades program has led to millions of inefficient energy products being replaced in households and businesses across the state since it began in 2009. This has reduced greenhouse gas emissions and saved Victorians hundreds of dollars a year.

The program also encourages investment, employment and innovation in industries that supply energy efficient products and services.

The certificate shortfalls and penalty amounts are as follows: