Hot topics

During FY18, we undertook an independent materiality review which identified a list of 12 most material issues to our stakeholders. Of these 12 material issues, two were identified to be particularly topical during FY18: energy prices and affordability, and the planned closure of Liddell Power Station. We recognise that there has been significant community and government concern about these issues, which is why we have given them special consideration in this report. A summary of these issues is provided below, with further detail provided elsewhere in this report.

Energy prices and affordability

We understand that energy bills can comprise a major proportion of some households’ living expenses. In June 2018, AGL announced that prices for FY19 for New South Wales, Queensland and South Australian customers will be going down – albeit very modestly – but that this is a change welcomed by our customers as compared with price increases we have seen in recent years. We understand power prices have been high and that has put pressure on many household budgets. In recognition of this we implemented a range of measures over FY18 to ensure that prices were as competitive as possible. We have also focused on customer affordability through our launch of A Fairer Way in 2017 and introducing loyalty discounts for longstanding Standing Offer customers during FY18.

These measures, along with a discussion of AGL’s approach to energy pricing and affordability issues more generally, is discussed in the Energy prices and affordability section.

Liddell Power Station

In April 2015, we gave advance notice to the market of our intention to close Liddell Power Station (Liddell) in 2022. We provided this notice to demonstrate our commitment to the gradual decarbonisation of our generation portfolio, and to avoid the volatility created by the sudden exit from the National Electricity Market of other coal-fired power stations. Our 2017 Rehabilitation Report provided additional detail on our plan, and set out our approach to engaging with the local community and other key stakeholders on options for a transition that is inclusive of all.

On 9 December 2017, AGL released its NSW Generation Plan for replacing the energy generation from Liddell with more affordable, reliable, and lower carbon-intensive electricity generation. An assessment of our plan found the replacement generation to be more affordable at $83/MWh, compared with extending the operating life of Liddell by five years at $106/MWh. Further, our plan was found to deliver reliable, dispatchable power for longer, due to a longer asset life of 15-30 years, compared with extending the life of the power station for five more years.

Further details on Liddell, our NSW Generation Plan, and our future plans for the site, are discussed in the Power station transition and closure section.