AGL pays $799,656 in penalties over allegedly miscalculating mandatory customer ‘best offer’ energy plan information

AGL Sales Pty Ltd (AGL) has paid a total of $799,656 in penalties after allegedly failing to calculate its ‘deemed best offer check’ in line with the prescribed formula for 22 customers over the period March to June 2022.

An energy retailer’s ‘deemed best offer’ is typically their cheapest generally available offer. It does not include one-off gifts or sign-up credits and is based on customer energy usage over the past year.

In Victoria, energy retailers must regularly inform their customers via their energy bills – every three months for electricity bills, and every four months for gas bills – if the customer is on their best offer, and how much money they could save by switching if a better offer is available. Customers can also ask their retailer for best offer information at any time.

Evidence gathered by the Essential Services Commission showed 22 customers did not receive the accurate best offer information they were entitled to from AGL as a result of the alleged calculation errors by AGL in respect of each customer.

AGL reported the issue following enquiries from the commission as part of the commission’s proactive program to monitor energy retailer compliance with customer best offer rules.

Commissioner Sitesh Bhojani says any breaches of customer best offer rules risk undermining this critical consumer provision to help customers engage confidently with the energy market.

“The commission regards AGL’s non-compliance in this matter as serious. Further, the fact this issue was only identified following proactive enquiries from the commission indicates that aspects of AGL’s best offer compliance system were inadequate,” Commissioner Bhojani said.

“Retailers that do not comply with their obligations under the best offer rules undermine the intended consumer benefits of these provisions, as well as consumer trust in energy businesses more generally.”

He said retailer obligations to provide customers with clear, timely and accurate best offer information were even more important with cost-of-living pressures challenging many Victorians.

“This is the second time in as many months that the commission has held an energy business to account for depriving customers of critical best offer information they are entitled to, to make informed decisions about the best value energy plan to suit their needs.”

Red Energy paid $254,436 in penalties in September 2023 after allegedly breaching customer best offer information rules.

AGL paid $73,958 in penalties in September 2023 for a separate enforcement matter relating to an alleged wrongful disconnection of a customer experiencing payment difficulty. This followed enforcement action taken against AGL in August 2022 in response to allegations it had breached customer payment assistance protections, and wrongfully disconnected three customers.

Commissioner Bhojani said helping consumers navigate the energy market with confidence is a key compliance and enforcement priority for the commission.

“Victoria has one of the most comprehensive sets of energy consumer protections in Australia when it comes to accessing essential energy services. Energy businesses who fail to uphold these safeguards risk enforcement action.”

The commission can issue penalty notices where it has reason to believe a business has contravened a civil penalty requirement. Payment of a penalty notice is not an admission of a contravention of a civil penalty requirement.