Meridian Energy says independent power company Electric Kiwi is barking up the wrong tree with complaints about its advertising.
Electric Kiwi has filed complaints to the Commerce Commission and Advertising Standards Authority over a series of recent Meridian advertisements on YouTube, Instagram, Facebook, a billboard and its website which focus on renewable energy and saving the planet.
The company claims Meridian is "greenwashing" its position in the energy market.
Luke Blincoe, chief executive of Electric Kiwi, claims the ads - which address "generating power from 100 per cent renewable sources" and "only generating our electricity through wind, water and sun" - are incorrect because Meridian has an agreement with Genesis Energy to use power from its Huntly plant as it is required.
However, Meridian says its arrangement with Genesis is a financial contract and it does not take power from the company.
In 2016 Meridian signed a four-year "swaption" contract with Genesis that came into effect in January 2019 allowing 100MW to be available year round, with an additional 50MW available in the winter months from April to the end of October.
Meridian owns wind and hydro power stations.
The contract with Genesis provides cover for any periods of low inflows to hydro lakes that could compromise the security of electricity supply.
NZX documents show Meridian "made calls on load under the Genesis Swaption" in May and June this year. Additional notes say Meridian has Virtual Asset Swaps with both Genesis Energy and Mercury.
"They do not result in the physical supply of electricity."
But Blincoe claims the ads mislead consumers to think that Meridian sources its energy exclusively from renewable generation. He said he believed it had breached the Fair Trading Act on grounds of misleading advertising and unsubstantiated representations.
"They are running these green ads while clearly being aware they have a 'swaption' with Genesis to burn fossil fuels, most likely coal," he said.
A spokesperson for Meridian said the company stood by its advertising claims. It said it only generated electricity from renewable sources.
"We have financial contracts with a number of other market participants, including Genesis, under which we hedge our wholesale market price risk," the spokeswoman said.
"We do not buy electricity from Genesis, we do not take or use energy from Genesis and we do not call on Genesis for power. When we say we call load under the Swaption we mean we call on our counterparty to meet their financial commitments to us – it is essentially a form of insurance against wholesale price risk."
In Electric Kiwi's submission to the Commerce Commission, the Auckland-based power provider which has 40,000 customers, said: "Meridian does not in fact only supply energy from renewable sources. Meridian buys thermal-generated electricity to cover periods where their renewable generation drops below expected amounts."
The Commerce Commission defines greenwashing as deceptive marketing designed to portray a company or product as caring for the environment when claims cannot be substantiated.
Blincoe claims Meridian customers get the same mix of electricity as customers signed on to other providers.
"Even if they didn't have the coal deal, the electrons their customers buy from the grid are exactly the same mix as every other retailer and it's still misleading to [imply] that they sell green electrons."
A spokesman for the commission confirmed the regulator had received a complaint over Meridian's ad and would assess it as part of its complaints process.
Meridian was investigated by the commission for its advertising around being carbon neutral following a complaint from National MP Nick Smith in 2009. The commission concluded the company's certification claims were substantiated.
The Advertising Standards Authority received a complaint in 2015 about a Meridian ad and its use of "saving the world" under the Code of Environmental Claims, however, the chair ruled the complaint had no grounds to pursued.
Blincoe claims greenwashing was widespread throughout the industry despite power companies knowingly using fossil fuels to generate electricity.
"At a time when we've got councils claiming climate emergencies, we've got state-owned companies making claims that overstate their environmental position and will ultimately lead to complacency among New Zealanders," he said.