Energy retailer CovaU has been fined $81,404 and has refunded more than $400,000 to customers after allegedly breaching Victoria’s energy rules.
The Essential Services Commission alleges that between July and September 2025, CovaU:
- failed to give 5,891 customers notice of an upcoming 1 August increase to their electricity and gas rates. Of those customers, 426 received a bill at the higher rate
- later withdrew the increase from those bills and refunded the customers who had already paid the higher amount
- did not apply the August price increase to the remaining 5,465 customers who had not yet received a bill, and later notified those customers of a September price increase.
In Victoria, energy retailers must tell customers in advance if they are going to increase the price on their energy plan.
To give customers on variable plans more price certainty, energy retailers can only increase rates once a year on a set date. For most customers, that date is 1 August. When price certainty rules are breached, customers may be overcharged and retailers must remediate those overcharges.
While CovaU moved quickly to refund its customers and reissue invoices, the commission alleges the September increase still breached Victoria’s energy rules.
CovaU has refunded the majority of impacted customers and made a number of changes to its systems and processes to address the reasons why the issue occurred.
Quotes attributable to Essential Services Commission Chairperson and Commissioner Gerard Brody
“While CovaU’s remediation was likely well-intentioned, it led to further breaches of price certainty obligations. If a retailer applies higher rates before it is allowed to, customers may be overcharged.”
“These rules exist for a reason. Victorians need to be notified of expected rising costs so they can make decisions relevant to their own circumstances and look for more competitive offers in the market.”
“Retailers cannot increase rates whenever they choose. The annual increase date is an important protection that gives customers more certainty about their energy costs.”
Background
On 1 July 2020, we introduced new rules to protect residential and small business consumers from unexpected energy price increases.
These rules mean energy retailers are only allowed to increase prices once a year.
For many customers, this happens on a set date one month after network prices change (usually on 1 August each year).
Customers on fixed-price contracts will only experience any price increases on the anniversary of their initial fixed-price period expiring.
Retailers can decrease their prices at any time.
Contact details:
0437 677 385
