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Watchdog investigates power ads

The Commerce Commission has launched an inquiry into Meridian Energy’s “carbon-neutral” advertising, amid claims the company is buying up to a third of its power from thermal generators.

South Island-based Meridian, the country’s largest electricity generator and the Government’s biggest state-owned enterprise, was certified carbon neutral last year by the Crown research institute Landcare.

This means the company does not contribute to the build-up of greenhouse gases in the atmosphere.

Meridian has capitalised on its carbon-neutral status on billboards and in television advertisements.

Its website says that customers who are concerned about climate change should switch to Meridian, because it generates only from renewable electricity sources.

However, Meridian conceded yesterday that the low lake levels in the company’s Waitaki catchment meant that it was purchasing significant amounts of power from thermal gas, coal, and diesel generators in the North Island to meet supply commitments to its 200,000 residential and business customers.

Meridian is Christchurch’s major power retailer.

The Commerce Commission confirmed yesterday it was talking to Meridian about its advertising. A spokeswoman said a preliminary inquiry had been launched and the commission would decide whether to mount a full investigation at a meeting next week.

Meridian spokesman Alan Seay declined to say how much of its supply to customers was currently being thermally generated, as it varied.

However, he said: “We’re currently a heavy purchaser off the market for thermal, yeah.”

Seay said Meridian was happy to co-operate with the Commerce Commission’s inquiries.

The company believed its carbon-neutral status was still valid since it was buying carbon “offsets” credits from renewable electricity generators such as wind farms.

National MP Nick Smith, who yesterday lodged a complaint with the commission over Meridian’s carbon-neutral claims, said he understood the company was sourcing about 30 per cent of its power from thermal generation.

Meridian was “greenwashing” the public and misrepresenting itself in its advertising. “It is unfair that Meridian has been taking customers off other power companies on the basis of its carbon-neutral claim, only to now have to buy power off those same companies to keep the lights on.”

Smith said Meridian’s claim that it was offsetting its emissions by buying carbon credits was not credible.

“The idea that Meridian can magically convert thermal electricity into certified carbon-neutral electricity by buying these sorts of carbon units is modern-day hocus-pocus. It has as much credibility as the old church practice of penance, where money could buy forgiveness for sins.”

Smith said if Meridian’s practice was left to stand, fuel companies could call themselves carbon neutral by purchasing millions of carbon credits under the looming emissions’ trading scheme.

Seay said most of the time Meridian put more renewable energy into the national grid than it removed for its customers, and its purchase of carbon credits in dry years had been approved by Landcare when it received its certification.

“It was a very thorough, robust process that we went through before we took this position and we’re very confident of it,” Seay said. “There’s no way this is just us making a marketing claim. No way at all.”

Meridian received support for its stance from the Green Party yesterday. Co-leader Jeanette Fitzsimons said Meridian could not be expected never to never use thermal generation. “To expect a renewable generator to build a firewall between itself and the rest of the system is a bit ridiculous.”

Meridian was still doing more for the environment than any other electricity generator, Fitzsimons said.

Meridian’s carbon-neutral certification is up for renewal this month. According to the Electricity Commission, Meridian has increased its customer base by 25,000 since becoming carbon neutral in February last year.

By Colin Espiner

The Press


14 June 2008