Origin Energy may face $1.1m fine over price increases

Origin Energy may face $1.1m fine over price increases

Origin Energy faces a million-dollar fine if the ACCC discovered the electricity company was using the carbon price as an excuse to increase Queensland power bills by $400 a year.

Australia’s business watchdog, the Australian Competition and Consumer Commission, would not last night commit to investigating Origin Energy’s power bill price increases to 430,000 Queenslanders.

A spokesman for ACCC chairman Rod Sims would only say the watchdog – which this month launched a carbon price claims hotline – could start court action with a $1.1 million fine.

“The ACCC can investigate and take action against businesses that make false or misleading claims,” the organisation said in a statement.

“The ACCC could issue an infringement notice of $66,000 for a listed company, or the ACCC could initiate court action where the maximum penalty is up to $1.1 million per breach of the act.”

No decision was taken yesterday, the ACCC said.

Last week, reports emerged that Origin Energy intended to lift its electricity bills by about $400 a year for about half of its customers.

The decision angered Premier Campbell Newman. The Government announced yesterday letters would be sent to government departments telling them to switch providers, which would prompt the cancellation of $27 million in government contacts with Origin Energy.

On Friday, Mr Newman said the state government was looking to refer the price rise to the ACCC.

The Newman Government announced yesterday plans to cancel 2529 electricity accounts held by government departments with Origin Energy, costing the company about $26.7 million in work.

In Townsville yesterday, Mr Newman said the electricity bill rises were “not justified” and “unacceptably high”, he said.

Mr Newman accused electricity providers of using the carbon tax as an excuse to increase prices.

“They’re trying to use that as an excuse, while consumers are confused, to actually put up prices more than what the carbon tax actually justifies,” he told reporters in Townsville.

The gripe emerged one month after the Newman Government put a price freeze on the domestic daytime use of electricity (tariff 11).

However the government did not freeze the rates for tariff 31 (the late night rate imposed when demand is low) or tariff 33 (often used to power items such as pool pumps).

On May 31, the Queensland Competition Authority ruled that tariff 31 would increase by 30.5 per cent or $1.14 a week.

It also ruled that the tariff 33 would increase by 25.5 per cent or $69 a year, or around $1.33 each week.

However Origin Energy said the QCA increases did not include cost of supplying the electricity to customers, claiming these “network costs” added about 50 per cent in increasing bills.

“Origin structures prices to reflect the actual costs of supplying energy to customers, including the networks, the introduction of the carbon price and the wholesale cost of energy,” company general manager corporate affairs Phil Craig said.

Mr Newman told reporters on Friday the Queensland Government had paid $60 million to ensure “pole and wire” repairs did not increase in the next 12 months, arguing the only increase should be a result of the carbon tax.

“The poles and wires business is being supported financially by the government to the tune of about $60 million, to stop a 14 per cent price increase.”

The only price increase that should be occurring should be due to the carbon price.”

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