AGL has acted quickly to put in place measures to support our people so that they in turn can ensure that our assets continue to function, and our impacted customers are looked after.
From March 2020, more than 5,000 employees and outsourced partners were transitioned to working from home arrangements to reduce risk to our people and to ensure business continuity. Our teams whose roles are essential to maintaining generation have been provided appropriate support to ensure they can continue to work on site, including splitting teams, providing 24-hour medical assistance, increasing deep cleaning and undertaking temperature testing.
Site-specific pandemic plans have been put in place across our operations, and with our flexible and diverse portfolio, we are well-placed to manage any issues that may arise.
We are continuing to work closely with governments and regulators to make sure our measures and responses are appropriate to ensure the demands on Australian businesses and consumers are met.
Employees are also able to access special leave for the purposes of caring for others, self-isolation or self-care. All employees and their immediate family members also continue to have access to confidential, impartial and professional counselling and coaching services through AGL's Employee Assistance Program. To date, AGL has not needed to stand down any employees due to the pandemic.
AGL has also provided support for small business suppliers by putting in place arrangements to pay them within 14 days. The majority of the 6,222 invoices received from the 977 identified small business suppliers were paid within 14 days.
AGL’s COVID-19 Customer Support Program was launched in March 2020, providing direct relief to AGL residential and small to medium business customers who are unable to pay their energy bills because they have lost their jobs or businesses, or their health has been impacted. Under this program, customers were able to defer payments and have the guarantee of no disconnections. Similarly, impacted commercial and industrial customers could also register for support. Over $51 million debt was registered under these programs as at 30 June 2020.
A range of measures was also introduced to support our Southern Phone Company customers, including lifting data caps on all NBN and ADSL plans, increasing data caps on all satellite broadband plans, removing common social media site usage from metering and providing $0 NBN education plans for low-income families to enable home schooling.
COVID-19 has impacted AGL’s electricity demand. We have experienced significant declines in electricity demand from retail, food and beverage customers in particular as these industries have been most significantly impacted by government restrictions, and smaller declines in utilities, finance, health and agriculture which have faced less extreme restrictions in their ability to operate. There has been little observable change in electricity demand from government, manufacturing, mining and communications customers. However, residential demand has increased. Overall, when normalised for weather, electricity demand in the NEM has been roughly flat year on year, and AGL’s generation has continued to operate at high utilisation levels.
Electricity forward curves, which were already decreasing for FY21 due to additional supply, have dropped further than previously forecast. Current spot electricity prices are being partially influenced by the pandemic-driven deferral of outages across the National Electricity Market (NEM). Spot gas prices also fell in the first half of 2020, driven by excess domestic gas supply and lower demand from gas generation.
AGL’s low gearing ratio, significant headroom and liquidity means that we are well positioned to manage through this crisis.
We have over $1 billion in cash and undrawn bank facilities, and material headroom not only to our debt covenants but also within our ratings metrics, providing a great deal of flexibility as the crisis progresses and for our capital management thereafter. AGL has run a multitude of severe scenarios to test the strength of our liquidity and credit metrics under stress. Even in the most prolonged and severe scenario analysis our liquidity and headroom are sufficient and we understand the business levers we can pull if necessary.
COVID-19 performance indicators (30 June 2020)
COVID-19 Support Program (residential/SME)
Number of applications1 (residential)
Number of employees accessing special leave provisions
Number of applications1 (SME)
Hours of special leave taken
Overdue debt registered under this program
Number of employees working remotely (average)
Total debt registered under this program
Number of outsourced partners (offshore)
COVID-19 impacted C&I customers
Overdue debt registered
Total debt registered
- 1 Each fuel (i.e. electricity and gas) is counted as a separate application.