Blue NRG will compensate several of its small business customers after it admitted to making false and misleading price increase claims for its fixed-contract customers in late 2022.
During an intervention from the Australian Competition and Consumer Commission (ACCC), Blue NRG admitted to telling 543 of its business energy customers on fixed-rate contracts that it had the legal right to increase their prices and would be effectively doubling them come 2023.
Fixed rate electricity contracts are designed to effectively ‘lock-in’ rates for eligible customers over an extended period, usually 12 to 24 months.
Blue NRG had told its customers on these offers that, despite these contracts still being in effect, it could change these fixed rates because of ‘force majeure’.
Force majeure is essentially a clause that allows a retailer, in this instance, to override their current pricing commitments due to an event out of their control. For context, Blue NRG’s notices were sent during a period of wholesale electricity market volatility last year.
According to the ACCC, the retailer had cited this clause during price increase notices made in November 2022 to business customers in New South Wales and Queensland, many of which were small businesses. It then sent a second notice almost a month later setting out the new prices which were to begin in 2023.
It was later found, however, that the related Blue NRG contracts either did not have a force majeure clause or a clause that did not cover the event in question.
Blue NRG has since agreed to a court-enforceable undertaking from the ACCC, which will see it abandon the proposed change and withdraw any notices of the price change. The retailer will also need to provide a refund or credit to any customers who have already paid invoices at the higher price.
Additionally, Blue NRG agreed to compensate any impacted customers who may have switched providers after receiving the notice last year. This will see the retailer cover the difference in costs from these customers’ original contract and their new offer.
Without intervention, the ACCC estimated that the proposed price increases would have cost impacted businesses about $5 million.
ACCC Deputy Chair Mick Keogh said the ACCC would continue to monitor energy retailers and ensure they honour the correct terms of their customer agreements.
“Small businesses, like consumers, are facing cost of living pressures, including higher energy prices,” he said. “We will not hesitate to take enforcement action where energy retailers make misleading or deceptive statements about increasing prices where they do not have a proper legal basis to do so.”
The news comes as two other retailers land themselves in hot water with the ACCC for breaching the electricity code for residential power customers.
I am an impacted Blue NRG customer: What should I do?
An independent auditor will soon be appointed to help recover and resolve any disputes between Blue NRG and its former impacted customers.
If you are an impacted Blue NRG customer who remained with the retailer, you can rest assured that you will still be able to benefit from the fixed rates set out in your contract for the life of your agreement. If you paid higher prices in the interim, it may be best to keep an eye out for any communication from Blue NRG of potential reimbursement.
Alternatively, if you are concerned, it may be best to contact the retailer directly for more information.
Image credit: fizkes/Shutterstock.com
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