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Posts Tagged ‘agl’

Energy company AGL responds to proposal to increase gas prices

Sunday, April 13th, 2014

ABC radio’s consumer affairs reporter Amy Bainbridge recently interviewed AGL’s Chief Economist Paul Simshauser about his company’s request of the NSW regulator to increase gas prices.

In the interview AGL says its request to increase its retail price for gas reflects market dynamics, as Australia’s east coast is exposed to international prices.

Simshauser said “There’s two things that are driving price increases at the moment. The first one is that wholesale gas prices are actually on the move, and they’re moving up in line with the contraction in supply/demand balance on the east coast of Australia. So right now you’ve got three very large LNG (liquefied natural gas) terminals being constructed up in Gladstone in Queensland. They are going to have a profound impact on the demand side of the equation in the gas market.”

Simshauser acknowledged the irony of the situation as consumers faced increased gas prices despite additional supply being available.

“So two things are happening at once. First of all, demand is outstripping supply, so that’s going to actually place pressure on wholesale prices to begin with. Secondly, the incremental supplies that are coming onto the market are an inherently higher cost resource than has historically been the case,” he said.

For the full transcript go to: http://www.abc.net.au/pm/content/2014/s3990822.htm

AGL reports flat underlying profit

Thursday, August 25th, 2011

AGL Energy today reported a flat Underlying Profit of $431.1 million for the year ended 30 June 2011, up only by half a per cent over the previous financial year.

AGL said that the result was flat due to extreme hot weather events in eastern and southern Australia in February, which effectively reduced profit by $30-$35 million, as well as softer demand for electricity from its Loy Yang A power station in Victoria’s LaTrobe Valley.

AGL’s Retail Energy business seemed to perform strongly with a 17 per cent increase in EBIT to $373 million, due mainly to improvements in gross margin on mass market customers resulting from a combination of electricity and gas price (tariff) increases in all states and a net increase in customer numbers of 52,000. AGL’s total customer accounts increased by 1.6 per cent to 3.29 million.

AGL, having lost out to Origin Energy and TRUenergy in the purchase of retail energy assets as part of the NSW electricity privatisation process that completed in March this year, has had to rely on an organic growth strategy in New South Wales to grow its customer base. AGL seemed content with the start it had made in NSW adding 96,000 new electricity customers in the six months to 30 June 2011.

AGL also noted the high degree of competition in energy retail markets and that the introduction of the new Australian Consumer Law on 1 January 2011 that limited the hours of operation of door-to-door sales had appeared to have had no impact on the level of door knocking activity.

AGL claimed its churn rate of 19 per cent is below the industry average, reflecting improvements made in customer service. Origin also reported yesterday a very similar level of customer churn.

You can read AGL’s full earnings release on their website.

TRUenergy says it is holding its own in NSW

Wednesday, August 17th, 2011

Announcing its first-half financial results in Hong Kong on Monday, CLP Holdings, the owner of Australia’s third largest energy supplier TRUenergy, reportedly said that contrary to speculation it had gained rather than lost customers in its recently acquired New South Wales energy retailing business, Energy Australia.

According to The Australian newspaper, Andrew Brandler, CEO of CLP, said that Energy Australia had withstood AGL’s attempts to poach its customers in the greater Sydney metropolitan area. AGL earlier this year announced its intention to aggressively acquire customers in NSW following its failure to acquire at a reasonable price one of the three NSW electricity suppliers privatised by the NSW Government late last year.

We have heard reports of very aggressive door-to-door sales activity in NSW over the last six months by several electricity providers, despite a slight reduction in the permitted door-knocking hours following the introduction of the new Australian Consumer Law earlier this year.  The real question is whether Energy Australia’s success in “retaining” customers is due to aggressive discounting to “save” customers poached by other retailers such as AGL or whether Energy Australia has itself been aggressively door-knocking to acquire new customers to replace the ones it lost to other retailers.

As discussed in our post earlier this week, Australian Power & Gas, Dodo Power & Gas and Red Energy have all launched very attractive new electricity offers in New South Wales over the last few months. It will be exciting to watch what transpires over the coming year in NSW.