The Commerce Commission said from Wellington yesterday that Contact Energy had agreed to apologise to affected consumers and network lines companies, publish public apology notices, make a $30,000 donation to the Citizens’ Advice Bureaux and overhaul its compliance systems.

Contact and its subsidiary Empower sent out, between last February and May, over 250,000 notifications to its customers explaining price changes that would affect their electricity bills.

The commission investigated and found that approximately 8250 customers in the Thames Valley, Tauranga, Eastland Networks and Central Otago areas were advised that changes in their electricity bills were due wholly or in part to increases in the network transportation costs when in fact those lines charges had decreased.

“These customers were therefore provided with misleading explanations for the price changes, which incorrectly and unfairly inferred that changes were due to increases imposed by network lines companies,” said commission chair Paula Rebstock.

The commission’s main concern was that Contact’s customers might have been discouraged from switching to other electricity retailers because they believed it was lines charge increases, not Contact Energy, which were primarily responsible for increasing electricity costs.

Although individual customers did not suffer direct financial loss as a result of Contact Energy’s conduct, its behaviour “had the potential to be harmful to competition in the electricity sector. The commission views any misleading and therefore anti-competitive behaviour that is likely to discourage switching very seriously,” Rebstock added.