Complaint against Meridian upheld by Advertising Standards Authority

Monday, 12 October 2020

Advertising Standards Authority ruling adds to Meridian’s controversies.

Meridian Energy misled consumers by suggesting in advertisements that they would receive and support renewable power by switching to the company, the Advertising Standards Authority ruled.

The authority ruled unanimously that television commercials and online advertisements made by Meridian were misleading because they made “unsubstantiated environmental claims about the nature and attributes of the electricity service delivered to retail customers”.

The decision was released as the Electricity Authority considers whether Meridian manipulated the wholesale price of electricity and indirectly caused thousands of tonnes of carbon emissions by unnecessarily spilling water from its South Island dams late last year.

Meridian’s TV adverts said consumers should “switch to Meridian for power that doesn’t cost the earth”.

The Advertising Standards Authority (ASA) said that could be interpreted as an environmental claim and was misleading, given that there was no connection between the power Meridian generated and the power consumers drew from the grid, which was pooled from all generators.

* Genesis boss adds to Meridian's woes voicing 'disappointment' over hydro spills

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Meridian chief marketing officer Michael Healy said that while it disagreed with the ASA’s decision, it had changed its advertising to abide by it.

“It was certainly not our intent to suggest that customers only receive electrons directly from Meridian’s wind farms or hydro stations as the complaint suggested,” he said.

Meridian is the country’s largest producer of renewable electricity.

But Luke Blincoe, chief executive of Electric Kiwi, which brought the complaint to the ASA, queried Meridian’s environmental track record.

He noted the Electricity Authority’s (EA’s) ongoing investigation into Meridian’s conduct.

The EA found in a preliminary ruling in June that Meridian had contributed to an “undesirable trading situation” by spilling water from its South Island dams that it could have used for generation.

Blincoe also noted that Meridian had a “swaption” arrangement with Genesis Energy, owner of the coal and gas Huntly Power Station.

In 2015, Meridian called on Genesis Energy to reverse a plan it had at the time to cease burning coal at the Huntly by 2018, warning that could result in a shortfall in electricity supply during “dry” years.

Meridian had defended its adverts to the ASA, saying it adhered to an environmentally sustainable model and was committed to “sustainability leadership in areas where it can make a meaningful difference”.

Its deal with Genesis did not mean it purchased electricity from Genesis, but should instead be seen as a form of insurance, it said.