Retail Energy sells natural gas, electricity and energy-related products and services to about 4 million residential and small business customer accounts^*1  across NSW, Victoria, South Australia and Queensland.  From 1 July 2007, AGL began retail energy operations for residential customers in Queensland.

AGL’s Merchant Energy division manages AGL’s wholesale energy portfolio including our renewable and thermal power generation interests and our upstream gas production interests. It also manages gas and electricity sales to major industrial and commercial business customers, and to other retailers.

During 2006/07, the acquisition and development of a range of generation assets grew AGL ‘s installed capacity from 1,687 MW to 1,777 MW^*2 .

In 2007, through an agreement with TRUenergy, AGL has divested the 180 MW Hallett Power Station and acquired the 1,280 MW Torrens Island Power Station in Adelaide.  AGL took ownership of TIPS from 2 July 2007 resulting in a 68% net increase in installed capacity.

Construction commenced on the 95 MW Hallett Wind Farm in South Australia and in Victoria the 140 MW Bogong Hydro development. AGL also acquired various generations assets as part of the Powerdirect acquisition.

AGL has further invested in it’s upstream gas portfolio during 2006/2007, in addition to our existing Camden Gas Project in New South Wales. AGL made three key acquisitions during the past year:

• AGL completed the purchase of a 50% shareholding in Queensland’s Moranbah Gas Project;
• AGL purchased a 27.6% shareholding in the Queensland Gas Company (QGC); and
• AGL purchased a 35% shareholding in CSM Energy.  CSM Energy is a company engaged in coal-mine methane extraction and commercialisation.

AGL retains its oil and gas licence interests in PNG (ranging from 11.9% to 66.7%).  New opportunities to commercialise the gas reserves, such as liquid natural gas (LNG) exports, are being investigated. 

^*2  Installed capacity at 30 June 2007 including equity generation in JV's.

AGL has maintained a diversified range of energy investments in generation, transmission, distribution, retail and energy related businesses:

• ActewAGL (50%). ActewAGL is a joint venture between AGL and ACTEW Corporation, an ACT Government-owned enterprise. It owns and operates the electricity network in the ACT and the gas networks in the ACT and surrounding area, as well as operating the ACT’s water and sewerage assets. ActewAGL also operates as an energy retailer and has 152,000 electricity and 107,000 natural gas customers.
• AlintaAGL (33%)^*3 . AlintaAGL is a joint venture between Alinta and AGL located in Western Australia involving retailing and cogeneration facilities.  The retail business operates in and around Perth supplying gas to over 500,000 customers, and more recently electricity to more than 1,000 business customers.  The cogeneration business has developed two 140MW facilities at Alcoa’s alumina refineries in Western Australia.
• GasValpo Chile (100%). GasValpo is the largest regional gas distributor in Chile outside the Santiago metropolitan area, with approximately 42,000 residential and 1,000 commercial and industrial customers.
• Elgas (50%). Elgas is the largest distributor and marketer of LPG in Australia. It also owns and operates Australia’s largest underground LPG storage facility (the Sydney LPG Cavern), located at Port Botany in Sydney.
• HC Extractions (100%). HCE produces LPG and naphtha by processing refinery by-products supplied by the adjacent Caltex oil refinery in Kurnell, Sydney.
• Loy Yang Power (32.5%). AGL holds an interest in Loy Yang A power station and the adjacent coal mine in Victoria’s Latrobe Valley.  Loy Yang Power is one of the lowest cost generators in the national market and the largest base-load electricity generator in Victoria.

^*3  On 2 November 2007, AGL announced that it will sell its 33% interest in AlintaAGL Pty Ltd to Alinta 2000 Ltd. Completion of the sale is scheduled to occur 31 December 2007.

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