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AGL has a heritage of delivering energy to Australian households and businesses for over 170 years, and over this time has demonstrated a commitment to long-term business decision making. We are committed to effectively managing our responsibilities to the community, our customers, our employees and our environment. This Sustainability Report outlines how we have performed against our goals and strategies over the past year and explains how we are placed to face the challenges of transformational change over the coming decade.
Australia’s energy markets are undergoing significant transformation. The implementation of an expanded Renewable Energy Target and emissions trading scheme by the Commonwealth Government will require investment of up to $30 billion in new renewable generation over the coming decade. Energy prices are likely to continue to increase as the economy shifts towards lower carbon fuels. AGL has developed an integrated energy strategy which provides portfolio flexibility. This sustainability report outlines how AGL is responding to this transformational change over the next decade.
AGL currently has the largest privately owned and/or controlled portfolio of renewable generation facilities in Australia. AGL’s owned, operated and/or controlled renewable generation assets comprise around 26% of AGL’s generation portfolio (by installed capacity). We have 353 MW of new renewable assets under construction as at 30 June 2009, and a further 2,000 MW of identified projects at various stages of development. These projects will leave AGL well placed to contribute towards the Commonwealth Government’s expanded Renewable Energy Target, which will require that 20% of Australia’s electricity be supplied from renewable sources by 2020.
AGL is Australia’s largest energy retailer with around 3.2 million customer accounts. By November 2008, we had transferred the majority of our customers onto a new single billing system. We believe that this single system billing platform will significantly improve our customer service in the medium term.
Regrettably, for a few months following completion of the customer transfers, a number of our customers experienced delays in receiving bills. This resulted in some of our customers eventually receiving a larger than normal bill for energy supplied over several months. We acknowledge that this caused financial difficulty for some of our customers. We also acknowledge that we did not communicate with our customers as well as we could have during this period. We have now fixed the issues which caused the billing delays and we have been working hard on improving our customer communications. We take this opportunity to apologise to those affected customers for any inconvenience and anxiety experienced during this period.
The AGL Board and AGL management believe that the safety and wellbeing of our employees is of paramount importance. This is particularly relevant as we increase our interests in the construction and operation of electricity generation assets and upstream gas projects.
Our medium-term goal is zero lost-time injuries. In the past year, we made significant progress towards this goal by reducing our Lost-Time Injury Frequency Rate (LTIFR) from 3.6 to 2.5. This was well ahead of our annual target of 3.0. Our target for the coming year is to further reduce this measure to 2.0.
A company relies on the high performance of its people to succeed over the long-term. We believe that there is a direct correlation between the level of engagement of our employees and achievement of the Company’s objectives. AGL’s objective is to be an employer of choice. As employee engagement increases, it becomes easier to attract and refresh the skilled people necessary to deliver our strategy.
Our people continue to be increasingly engaged. During 2008/09, our employee engagement rating improved again after improving substantially during 2007/08. This increase in engagement provides a clear indication that the initiatives we have focused on delivering are having a positive impact on engaging our people.
We believe that AGL has a responsibility to work with the community to develop mutually beneficial outcomes and to manage sensitively the environmental aspects of our individual projects. Over the past 12 months we have continued to consult with communities where we are developing projects, and we delivered a range of positive outcomes through the Energy for Life program.
We welcome your views on this report, our broader performance and our stakeholder communication. Mechanisms for providing feedback are outlined in this report.
Mark Johnson
Chairman
Michael Fraser
Managing Director and CEO
