AGL ENERGY LIMITED. — Investor Presentation 2009

Mar 8, 2009

AGL Energy Limited ABN: 74 115 061 375 AUSTRALIA

Locked Bag 1837 St Leonards NSW 2065

Level 22, 101 Miller St T: +61 2 9921 2999 North Sydney NSW 2060 F: +61 2 9921 2552 AUSTRALIA www.agl.com.au

ASX statement

9 March 2009

Attached is a presentation to be made by Managing Director Michael Fraser during AGL’s US Investor roadshow.

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Paul McWilliams Company Secretary

AGL Energy Limited

…Australia’s largest integrated renewable energy company...

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Michael Fraser Managing Director & CEO Stephen Mikkelsen Chief Financial Officer

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US Investor Roadshow March 2009

Disclaimer

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The information in this presentation:

• › Is not an offer or recommendation to purchase or subscribe for securities in AGL Energy Limited or to retain any securities currently held.

• › Does not take into account the potential and current individual investment objectives or the financial situation of investors.

• › Was prepared with due care and attention and is current at the date of the presentation.

• › Actual results may materially vary from any forecasts (where applicable) in this presentation.

• › Before making or varying any investment in securities in AGL Energy Limited, all investors should consider the appropriateness of that investment in light of their individual investment objectives and financial situation and should seek their own independent professional advice.

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» US Investor Roadshow

Agenda

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› About AGL Energy – Background, Strategy & 1H09 Result Overview

• › Australian Energy Landscape & Renewable Policies

› AGL Renewable Positioning & Portfolio Opportunities

• › Outlook & Way Forward

• › Supplementary Information

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About AGL Energy

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• » US Investor Roadshow

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About AGL Energy

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Australia’s largest integrated renewable energy company.

• › Australia's largest natural gas & electricity customer base

• › A world class, scaleable customer management & billing system (Phoenix SAP solution)

• » Australian industry leading customer acquisition & service costs

• › Australia’s largest private owner, operator & developer of renewable generation

• › Australia’s largest contracted gas portfolio & emerging positions in new Coal Seam Gas (CSG) developments

• › Substantial generation portfolio with diversity across geography, fuel type & generation mix

• › Industry leading portfolio of renewable & thermal development projects

• › S&P/ASX50 stock with market capitalisation of ~AUD$6 billion

• › BBB investment grade credit rating (Standard & Poor’s)

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» US Investor Roadshow

AGL Energy Today – Asset Profile

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» US Investor Roadshow

The Integrated Strategy

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Balancing risk between upstream supply, retail markets & providing access to multiple profit pools.

Upstream Gas:

• › Direct ownership of ~2,000 PJ (2P) over the medium term

• › Essentially CSG strategy

• › Disciplined decision around trade-off between acquiring gas and EPS impacts

• › Will continue to contract if achieves superior outcome

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UPSTREAM SUPPLY
(Core)
Gas Renewable Thermal
Production Generation Generation
›
TRANSMISSION
(non core)
GAS ELECTRICITY
›
DISTRIBUTION
(non core) ›
GAS ELECTRICITY
RETAIL MARKETS
(Core)
Gas Renewables Electricity
opportunities opportunities
Capturing value & growth
Capturing value & growth
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Generation:

Currently ~3,730 MW of capacity owned and/or operated (includes ~220 MW under construction)

Medium term target of ~6,000 MW

Achieve 60-70% of load (capacity) internally covered to deliver desired portfolio outcomes

Market Leadership:

• › Ultimate focus on managing and growing margin, not specific customer number targets

• › Customer base / channel to market important in leveraging upstream strategy & achieving retail economies of scale

• › Potential base of 4 to 5 million customers given any participation in NSW privatisation

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» US Investor Roadshow

The Integrated Strategy – In Action

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Divesting non core assets, acquiring & creating long term growth opportunities.

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Sold AlintaAGL retail & cogen business (non core asset sale)
NOV 07 Announced intention to build (71MW) Hallett 2 Wind Farm
Acquired Enertrade (QLD) gas merchant business in 50/50 JV Arrow Energy
Acquired 66% output from 130MW Condamine Gas fired power station
JAN 08 Acquired rights to develop Berwyndale / Wallambilla (QLD) pipeline with QGC
MAR 08 Acquired development rights to 71MW, Hallett 3 wind farm
Sold GasValpo (non core asset sale)
MAY 08 Entered agreement to develop 189MW, Hallett 4 Wind Farm
Announced intention to sell PNG oil and gas assets (non core asset sale)
JUN 08 Sold North QLD Gas Pipeline (JV with Arrow) (non core asset sale)
Acquired equity investment and executed geothermal alliance agreement with Torrens Energy
JUL 08 Investment in Gallilee Basin CSG production & pilot exploration
Acquired Allco Wind Farm portfolio (7 projects totalling up to ~1100MW)
AUG 08 Sold 71.4MW Hallett 2 Wind Farm (retaining output, naming rights and O & M contract)
Sold Elgas (non core asset sale)
OCT 08 Sold QGC stake to BG for $1.18 billion, acquired options over certified gas reserves, exploration acreage, power station & gas supply
contract
NOV 08 Acquired Tri-star 400TJ gas bank & 50% Tri-star interests in Spring Gully CSM project
BBB (S&P) credit rating revised to stable outlook
Acquired Investec Wind Farm development projects (2 projects totalling up to ~560 MW)
DEC 08 Acquired Gloucester Basin CSG assets
Announced take over of Sydney Gas Limited
JAN 09 Acquired interests in Innamincka Cooper-Basin gas permits
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» US Investor Roadshow

1H09 Result Highlights

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Delivering on strategy, creating value & long term growth.

FINANCIAL	› Revenue: $2,977.7m, �5.1% › Operating EBIT from continuing operations: $322.7m, �10.2% › Statutory NPAT: $1,654.8m › Underlying NPAT: $192.5m, �5.3% › Interim dividend 26 cps, fully franked – DRP in operation
OPERATIONAL	› Maintaining retail margins (+0.1%), customer accounts (+1,900) & dual fuel (+10,000) › Final core SAP (Phoenix) customer migration completed › Hedge book continues to perform well, generation plant reliability & performance solid › Strong wholesale gas portfolio performance › Generation development projects on time and budget � � � � �
STRATEGIC	› Non core asset sales deliver $1.5 billion after tax › Balance sheet strength – reinstated BBB stable outlook, further growth capacity › Deep portfolio of renewable and gas generation development projects › Upstream gas acquisitions to deliver long term value and growth › Phoenix focus now turns to Business Transformation Program and benefit realisation � � � � �

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» US Investor Roadshow

1H09 Profit & Loss (excluding significant items & fair value movements) Result in line with full year guidance.

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6 months to $m	31 Dec 2008	31 Dec 2007	Change
Revenue	2,977.7	2,833.8	5.1%
Operating EBITDA	443.9	471.4	(5.8%)
Operating EBIT
Retail	145.7	134.8	8.1%
Merchant	211.9	156.9	35.1%
Gas & Power Development (incl pro forma adjustment)	34.5	82.0	(57.9%)
Energy Investments	30.5	50.6	(39.7%)
Centrally managed expenses	(63.5)	(51.4)	23.5%
Total operating EBIT	359.1	372.9	(3.7%)
Less: Net finance costs	(60.9)	(94.4)	(35.5%)
Profit before tax	298.2	278.5	7.1%
Less: Income tax expense	(105.7)	(95.7)	-
Underlying NPAT	192.5	182.8	5.3%

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Disciplined Capital Management

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Well positioned for future growth opportunities.

• › October 09 maturities covered by cash reserves

• › Immediate debt capacity of ~A$1.2b to A$1.8b

• › Reinstated BBB stable credit rating

Facilities @ 20 Feb 2009 $m	Limit	Usage	Available	Maturity
Current
Revolving credit facility	500.0	-	500.0	Oct 09
Term facilities Tranche B	633.3	633.3	-	Oct 09
Non Current
Term facilities Tranche A	222.5	222.5	-	Oct 10
Revolving credit facility	327.5	-	327.5	Oct 10
Term facilities Tranche C	886.7	886.7	-	Oct 11
Total debt facilities	2,570.0	1,742.5	827.5
Cash	-	1,555.0	-
Net Debt	-	187.5	-

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» US Investor Roadshow

Defensive Earnings Profile

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Robust earnings during deteriorating economic conditions.

› Majority of electricity & gas gross margin is derived from mass market customer base which historically has had limited volume impacts during economic downturns

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Electricity Gross Margin Contribution
(total ~$168m)
C & I
8%
Mass
Market
92%
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Gas Gross Margin Contribution
(total ~$111m)
C & I
15%
Mass
Market
85%
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Upstream Gas

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Strategic acquisitions to deliver upside growth & optionality.

• › Recent transactions deliver access & control over additional certified 2P reserves with further, material upside potential & optionality:

• » Investment in Galilee Basin CSG production pilot & exploration program

• » Entered into option agreement with BG Group

• » Acquisition of Tri-Star gas bank and minor Spring Gully interests

• » Acquisition of Gloucester Basin reserves & development program

• » Takeover of Sydney Gas

• » Farm-in to Innamincka tenements

• » Take up of Moranbah / Bowen Basin tenements[1]

AGL Share of CSG reserves	As at 31 Dec 08	As at 31 Dec 08	As at 30 Jun 08	As at 30 Jun 08
(PJ)	2P	3P	2P	3P
Moranbah(50%) Camden(100% following Sydney Gas acquisition) Gloucester(100%) Spring Gully(various)	416 82 175 6	1,051 108 370 8	277 412 - -	867 542 - -
Total	679	1,537	318	921

1. Full back in rights to 50% of PL 223 & PL 224 for $3.9m (representing 50% of past costs) - now responsible for 50% of future costs

2. AGL interest was 50% as at 30 Jun 08

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» US Investor Roadshow

Retail – Phoenix (SAP) Business Transformation Capturing Benefits.

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Cumulative EBIT Benefits

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$60m
$25m $25m
$12m FY10
FY08 FY09
FY07
Actual Actual
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• › Final core retail migration to SAP (Phoenix) completed Nov 2008:

• » ~93% of total customer base now serviced out of SAP

• › Business Transformation Program now established to ensure optimisation, timing and delivery of SAP benefits.

Sources of EBIT benefits

100

• IT and Systems consolidation

• 90 Support Outsourced application management 80 Sales and Improved data accuracy and customer insight

• 70 Marketing Reduced churn, improved Save and Win-Back 60 Customer Call centre automation, increased productivity

• 50 Services Enhanced ‘self-serve’ and virtualisation

40 30 Back Reduced duplication and greater data accuracy 20 Office and Billing productivity and exception reduction Debtor Transformation of Credit Management 10 Management More rigorous collections capability 0

• › Continue to target further $35m of annualised benefits to be realised in FY10:

• » FY09 period of operational and systems consolidation

• » Transitionary cost increases being incurred to achieve end project targets

• › Capex of $164.4m following final core retail migration:

• » Within 10% of enhanced scope estimate per previous guidance

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Australian Energy Landscape & Renewable Policies

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Australia’s National Electricity Market (NEM)

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• › National Electricity Market (NEM) began operating as a wholesale market for supply of electricity to retailers and end-users in 1998

• › World’s longest interconnected power system – 4,000 km (2,500 miles)

• › Exchange between electricity producers & electricity consumers facilitated through pool - output from all generators aggregated & scheduled to meet demand.

• › Market operates with a price cap of $10,000 per MWh (VoLL = Value of Lost Load)

• » Dispatch price every 5 mins, 6 dispatch prices every 30 mins to determine spot price for each trading interval for each NEM region

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Queensland
~51,700GWh
AGL ~10,900GWh
South Australia
~14,300GWh
AGL~ 5,900GWh
New South Wales
~78,900GWh
AGL ~11,400GWh
Victoria
~52,700GWh
AGL ~11,200GWh
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Tasmania
~11,000GWh
AGL nil
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» US Investor Roadshow

Australian NEM Generation Mix

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Coal dominates the current Australian landscape.

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Generation Capacity: ~43,000 MW
Gas
15%
Wind
2%
Coal
Hydro
65%
17%
Oil
1%
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Generation Output: ~210,000 GWh
Gas
Wind 8%
1%
Hydro
6%
Oil
1%
Coal
84%
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» US Investor Roadshow

Proposed Renewable Legislative Changes.

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Federal Government to legislate two schemes – Expanded RET & Carbon Pollution Reduction Scheme (CPRS).

Expanded Renewable Energy Target (RET) scheme (Expanded RET previously called MRET)

• › Target to increase from 9,500 GWh in 2010 to 45,000 GWh in 2020

• » Draft legislation has been released

• » Legislation listed for consideration by Parliament Autumn sitting 2009

Carbon Pollution Reduction Scheme (CPRS)

• › Scheme to commence on 1 July 2010 and operate on a financial year basis with annual compliance obligations

• » To be a ‘Cap & Trade’ scheme - permits will be created and will reflect a cap on total Australian greenhouse gas emissions

• » Businesses required to purchase permits for each tonne of greenhouse gasses emitted

• » Scheme to have a price cap (i.e. penalty) for first 5 years

• » The Government has announced the first three yearly targets (109%, 108% and 107% of 2000 levels) and a gateway for 2020 (85-95% of 2000 levels)

• » Transitionary assistance for coal generators to be determined through Electricity Sector Adjustment Fund

• » Passage of draft legislation in mid 2009 and consultation on supporting regulations during 2009

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» US Investor Roadshow

Required Renewables Growth

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Expanded Renewable Energy Target (RET) Drives Growth.

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50000
Exisiting MRET Expanded RET
45000
40000
35000
30000
25000
New renewable
20000 generation required
15000
10000
5000
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
GWh
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• › New federal Government Policy – by 2020 an additional 35,500 GWh p.a. of renewable energy required to meet the target of 45,000 GWh p.a.

• › If all new capacity is wind, implies ~12,000 MW of new renewable capacity

• › AGL’s leading existing renewable portfolio & development options will deliver material upside via REC and black electricity price appreciation under Expanded RET & Carbon Pollution Reduction Scheme

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» US Investor Roadshow

Required Renewables Growth

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Indicative new build generation mix dominated by renewables.

› Investment in renewable generation under expanded RET displaces gas fired generation and moderates gas demand as a transitional fuel

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Current MRET + CPRS
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• 2020 New Build Generation Mix » CCGT ~ 5,300 MW » OCGT ~ 4,800 MW » Renewables ~ 1,000 MW

• » Balance coal

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Expanded RET + CPRS
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2020 New Build Generation Mix

• » CCGT ~ 2,900 MW » OCGT ~ 5,900 MW » Renewables ~ 6,900 MW » Balance coal

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Renewables Dominate
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Source: AGL Internal Modelling

» US Investor Roadshow

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AGL Renewable Positioning and Portfolio Opportunities

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Renewables & Carbon: First Mover Advantage AGL’s strategy benefits from recent Government announcements.

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EXISTING AGL STRATEGY RECENT GOVERNMENT POLICYRECENT GOVERNMENT POLICY POSITIVE AGL OUTCOMESPOSITIVE AGL OUTCOMES
~930 MW renewable generation in
Government committed to expansion of operation, ~220 MW under
First mover advantage developing pipeline Renewable Energy Target to 45,000 GWh construction and identified
of renewable energy opportunities in 2020 development pipeline of up to
~2200 MW
Investment in Geothermal
Investing in emerging renewable Establishment of $500 million Renewable
(Torrens Energy), investigating other
technologies Energy Fund
emerging opportunities
Early mover investment in renewable Carbon Pollution Reduction Scheme AGL generation portfolio could
increase in value by up to ~$300
generation (CPRS) will be introduced in 2010
million (NPV)
White Paper proposes Electricity Sector
Work with Loy Yang A to ensure investment Transitional assistance through ESAF
value maximisation Adjustment Fund (ESAF) to assist coal for Loy Yang A
fired generators
First and only Australian utility to
Develop skills in international and domestic White Paper proposes international trade on Chicago Climate Exchange,
emissions trading linkages through Kyoto mechanisms instigated domestic carbon trading
ahead of CPRS introduction
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FIRST MOVER ADVANTAGE
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» US Investor Roadshow

Australia - World Class Wind Resource

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Average wind speeds (metres per second)

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• › Wind resource is best in Tasmania and areas in Western Australia, South Australia and Victoria

• › NSW, Queensland and the Northern Territory have limited large scale wind potential

• › The best wind sites are already accounted for in Tasmania, South Australia and Western Australia

• › AGL has achieved first mover advantage locking down identified sites with leading project economics

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Source: CSIRO

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» US Investor Roadshow

Renewable Generation – Growth Pipeline Developing a portfolio with strategic depth and optionality.

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		Nominal
	Project	Capacity	Location	Type	Project Status	Definition
		(MW)
	Bogong	140	Victorian Alps	Hydro	Under Construction	Committed
	McKay Creek Up Rate	10	Victorian Alps	Hydro	Under Construction	Committed
	Hallett 2	71	SA - Hallett	Wind	Under Construction	Committed
	Hallett 3	80	SA - Hallett	Wind	In Development	Probable
	Hallett 4	132	SA - Hallett	Wind	In Development	Probable
	Oaklands Hill	63	VIC - West	Wind	In Development	Probable
Renewable	Hallett 5	50	SA - Hallett	Wind	Permitted	Possible
Generation	Macarthur	330	VIC - West	Wind	JV with Meridian	Possible
	Crows Nest	150	QLD - Toowoomba	Wind	Permitted	Possible
	Worlds End	180	SA - Burra	Wind	Permitted	Possible
	Ben Lomond	150	NSW - Armidale	Wind	Landowner Agreements in place	Possible
	Coopers Gap	300	QLD - Kingaroy	Wind	Landowner Agreements in place	Possible
		4 Projects
	Other	totalling up to	Various	Various	Under Review	Possible
		720
	Torrens Energy Geothermal Alliance		Torrens Energy is sole-funding exploration and studies ahead of the first deep well
	(AGL 50% farming in)		planned to be drilled	by AGL in FY10

• › Probable Projects: Projects which are under development with an approved budget and pending final investment decision › Possible Projects: Projects where AGL holds rights to the sites and/or where the final investment decision is expected to be in excess of 12 months › CAPEX: Current AGL indicative installed capex for wind is approximately $2.7m to $2.9m / MW

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» US Investor Roadshow

Gas Generation – Growth Pipeline Developing a portfolio with strategic depth and optionality.

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	Project	Nominal Capacity (MW)	Location	Type	Project Status	Definition
	Leafs Gully	360	NSW - Appin	Gas Peaker	In Development, Development application beingassessed	Probable
	Tarrone	500	VIC - West	Gas Peaker	In Development	Probable
	NQ Peaker	360	Nth QLD - Townsville	Gas Peaker	Site Acquired	Possible
	SEQ 1	360	SE QLD - Ipswich	Gas Peaker	Site Secured	Possible
Gas Generation	SEQ 2	1,150	SW QLD - Kogan	Gas Peaker/CCGT	Site Acquired	Possible
	ACT Peaker	500	ACT	Gas Peaker	Pre-Feasibility	Possible
	Other	4 projects totalling up to 2,010	Various	Gas Peakers	Sites secured	Possible
	Condamine Option		Continuing to undertake technical and commercial due diligence - option expires 14 April 2009 (no interest payable if option not exercised)

• › Probable Projects: Projects which are under development with an approved budget and pending final investment decision

• › Possible Projects: Projects where AGL holds rights to the sites and/or where the final investment decision is expected to be in excess of 12 months

• › CAPEX: Current AGL indicative installed capex for Open Cycle Gas Turbine (OCGT) plant (peaking) is approximately $0.7m to $0.9m / MW

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» US Investor Roadshow

A Carbon Effective Portfolio

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Both the current & future AGL generation portfolios are well positioned to deliver material upside in a carbon constrained environment.

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Current generation ~ 3,730 MW [1] Potential generation post development
projects ~11,170MW [2]
Coal
6%
Coal
18%
Gas Renewables Gas
Renewables 51% 30% 64%
31%
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US Investor Roadshow

1 = Owned & / or operated including plant under construction (~221MW)

»

Upstream Gas – Delivering Duration & Flexibility

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Increasing self supply.

• › Existing portfolio flexibility allows timely development of gas production projects

• › AGL will continue to be a significant contractor of wholesale gas

• › Anticipate recent acquisitions of Gloucester, Sydney Gas/Hunter, Galilee & Innamincka interests together with ongoing wholesale contracting will satisfy supply requirements post 2017

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Current Gas Portfolio Future Gas Portfolio – Post 2017
(~3,700 PJ) (~4,000 PJ)
Equity
Gas
18%
Equity
Contract
Gas
50%
50%
Contract
82%
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» US Investor Roadshow

Upstream Gas – Growth Pipeline

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Developing a portfolio with strategic depth, duration and optionality.

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» US Investor Roadshow

29

Outlook & Way Forward

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• » US Investor Roadshow

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Financial Outlook & Strategic Priorities

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• › Reconfirm FY09 EBITDA guidance of $775 million to $820 million

• › Reconfirm FY09 underlying NPAT guidance of $370 million to $400 million:

Financial outlook

» Excludes SunGas & Powerdirect customer amortisation charge of $18.1m

• › Reconfirm dividend payout policy of ~60% of underlying NPAT, fully franked

» AGL currently scheduled to release FY09 result Thursday, 20 August 2009

• › Ongoing, disciplined roll out of integrated strategy:

• » Expansion of renewables portfolio

Strategic priorities

• » Exploration and development of existing gas acreage and reserves

• » Development of gas generation portfolio

• » Delivering benefits of Phoenix Business Transformation Program

• › Integrated strategy supports delivery of sustainable shareholder returns in challenging economic conditions and through various market cycles

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» US Investor Roadshow

Further Information / Contacts

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A range of information on AGL Energy Limited including ASX & Media Releases, Presentations, Financial Results, Annual Reports and Sustainability Reports is available from our website: www.agl.com.au

alternatively, contact:

Graeme Thompson Head of Investor Relations AGL Energy Limited phone: +61 2 9921 2789 mobile: +61 (0) 412 020 711 e-mail: gthompson@agl.com.au

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32

Supplementary Information

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» US Investor Roadshow

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Significant Items

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Asset sales deliver substantial profits.

6 months to 31 Dec 2008 $m	Pre Tax	Tax	After Tax
Divestment of PNG	926.6	(36.0)	890.6
Divestment of QGC	754.4	(247.5)	506.9
Divestment of Elgas	149.9	(29.0)	120.9
Divestment of North Queensland Pipeline	23.1	(9.5)	13.6
Other divestments	0.4	(0.1)	0.3
Demerger adjustments	(6.7)	15.8	9.1
Phoenix change program costs	(22.4)	6.7	(15.7)
Redundancy, termination & integration costs	(3.1)	0.9	(2.2)
Total significant items	1,822.2	(298.7)	1,523.5

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» US Investor Roadshow

Balance Sheet

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As at $m	31 Dec 2008	31 Dec 2007
Current assets	3,932.9	3,576.8
PPE and oil & gas assets	2,561.9	2,331.4
Other non current assets	3,752.6	4,291.0
Total Assets	10,247.4	10,199.2
Current liabilities	1,609.1	2,053.4
Total debt	1,756.0	2,390.9
Other non current liabilities	670.4	762.5
Total Liabilities	4,035.5	5,206.8
Net Assets	6,211.9	4,992.4
Contributed equity	4,010.0	3,858.3
Reserves	248.2	745.0
Retained earnings	1,953.7	389.1
Total Equity	6,211.9	4,992.4

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» US Investor Roadshow

Operating Cash Flow Summary Continued focus and improvement.

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6 months to $m	31 Dec 2008	31 Dec 2007
EBITDA (before significant items)	443.9	471.4
Equity accounted associates & joint ventures (net of dividends received)	4.6	(6.9)
Net finance costs	(69.1)	(91.9)
Tax refunded (paid)	59.3	(57.9)
Working capital and other non-cash movements	(140.0)	(176.3)
Net NEMMCO and futures margin calls	10.7	94.2
Operating cash flow	309.4	232.6
Stay In Business (SIB) capex	(19.8)	(10.8)
Cash flow after SIB capex	289.6	221.8
Less: Dividends paid	(81.5)	(112.7)
Free cash flow	208.1	109.1

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» US Investor Roadshow

Industry Leading Generation Portfolio & Opportunities

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AGL’s extensive renewable portfolio and development opportunities will deliver material competitive advantage in a carbon environment.

Generation - Operating & Committed

Generation – Development Opportunities

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4,000 8,000
Br. Coal Gas Renewable
3,500 7,000
Gas Renewable
103 2,155
3,000 934 6,000
5,000
2,500
1,598
4,000
2,000
1,894 3,000
1,500 31 5,240
2,000
558
1,000
270
1,464 1,480 1,000
1,306 1,450
500 500
689 0
221
0 - AGL ORG TRU
Operating Constr'n./ Operating Constr'n./ Operating Constr'n./
Commit'd Commit'd Commit'd
AGL ORG TRU * Assumes 1,450
excl. Contact * incl. Roaring 40s
Permitted is Gas
C ap ac ity (M W )
Capacity (MW)
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Competitor Comparison Customer numbers and gas reserves.

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37
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Customer Numbers

Gas Reserves (2P)

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3,500 6,000
Electricity Gas 2P Reserves
3,000
5,000
Contracted
2,500 1,419
4,000
878
2,000
3,000
5,482
1,500
160
Contract
2,000
1,000 1,805 1,735 545 20 3,119 positions not
disclosed for
1,250 1,000
500
744 840 870 Origin & TRU
679
0 0
AGL ORG TRU EA IE CE AGL ORG TRU
PJ
'000
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• AGL, ORG and TRU - reported numbers Dec 08

• EA, IE and CE are indicative as at June 08

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» US Investor Roadshow

Renewable Energy Certificates (RECs)

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Expanded RET to put upward pressure on pricing

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$80.00
SPOT 2003 2004 2005 2006 2007 2008 2009
2010 2011 2012
$70.00
$60.00
$50.00
$40.00
$30.00
$20.00
$10.00
Apr-03 Oct-03 Apr-04 Oct-04 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Feb-09
$/REC
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Source:AFMA price chart

» US Investor Roadshow

Electricity Flat Forward Price Curve (Calendar year contract) Carbon, coal pricing and electricity demand growth to drive pricing.

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$ MW/h
100
NSW QLD SA VIC
90
80
70
60
50
40
30
20
10
0
Oct-03 Apr-04 Oct-04 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Feb-09
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Source: ICAP

» US Investor Roadshow

Australian NEM Generation Demand Growth

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Average growth in peak demand and total load of ~3% p.a.

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Peak Demand Total Load
40,000 250,000
35,000
200,000
30,000
25,000
150,000
20,000
100,000
15,000
10,000
50,000
5,000
- -
99 00 01 02 03 04 05 06 07 99 00 01 02 03 04 05 06 07
Year Year
MWs GWhs
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Current Renewable Legislative Landscape. Disparate collection of state and federal based policies.

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• › The Mandatory Renewable Energy Target (MRET) requires all retailers (& wholesale purchasers) to purchase set proportion of their energy from ‘new renewable’ generation (post 1997 – Renewable Power Percentage multiplied by sales)

• › By 2010, retailers in total required to purchase 9,500 GWh of new renewable generation

• › Retailers purchase Renewable Energy Certificates (RECs) to comply with their obligation – 1 REC equals 1 MWh of renewable generation

• › Retailers cannot use MWh of renewable energy to meet both GreenPower demand and obligations under MRET

• › Penalty charge is $40 per MWh shortfall (tax effective $57)

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» US Investor Roadshow

Carbon Pollution Reduction Scheme – White Paper AGL industry leading generation portfolio to benefit.

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Indicative AGL financial outcomes under CPRS[1,2]

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$350
$300
$250
$200
$150
$100
$50
$0
$10-$20 $20-$40
$/t CO2 [e]
Earnings change NPV to 2020 (discount rate 9%)
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• › All indicators suggest measured start to Carbon Pollution Reduction Scheme (CPRS) in 2010

• › Forward AEU’s currently trading around $20 tCO2[-e]

• › Transitionary assistance to be determined through Electricity Sector Adjustment Fund

• › Expanded Renewable Energy Target policy likely to drive majority of abatement under CPRS 5%

• › Current AGL generation portfolio diversity to deliver immediate benefits under CPRS

• › AGL deep pipeline of renewable projects to add further value forward under CPRS

Source: AGL Internal Modelling

1. Includes plant in operation (including Loy Yang A) plus renewable plant currently under construction and scheduled to be operational by 2010.

2. Outcomes Based upon CPRS 5% scenario (all abatement sourced from electricity sector) - pool price uplift reflects NEM average (discounted for -

peaking) - cost increases reflecting plant emissions intensity - outputs based on historical averages. Includes permit allocation to Loy Yang A based upon calculation outlined in the CPRS White Paper (discounted to reflect equity share)

• » US Investor Roadshow

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Carbon Pollution Reduction Scheme - White Paper

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AGL industry leading generation portfolio to benefit.

Region	AGL Power Stations	Station Intensity	Regional Intensity	NPV Uplift (to 2020)
Queensland	Yabulu Oakey	0.5 0.7	1.040	~$95 million2
New South Wales	-	-	1.062
Victoria	Somerton AGL Hydro1 Bogong Loy Yang A	0.7 0 0 1.2	1.31
South Australia	TIPS Hallett 1 & 2	0.6 0	0.979

1. While some of the AGL Hydro plant are in New South Wales, they have been included in Victoria for simplicity

2. Outcomes based upon CPRS 5% scenario (all abatement sourced from electricity sector) - pool price uplift reflects NEM regional averages (discounted for peaking) - cost increases reflecting plant emissions intensity - outputs based on historical averages. Excludes permit allocation to Loy Yang A.

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»

New Build Gas Generation Moderated.

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Gas demand materially moderated under combined CPRS and expanded RET policies.

Indicative gas demand growth scenarios[1]

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250
Current MRET Current MRET+CPRS Expanded RET+CPRS
200
Expanded RET
moderates gas
150
demand
100
50
Source: AGL Internal Modelling
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Gas consumption for new gas-fired power generators (PJ)
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• › Expanded RET drives uptake of renewable generation at the expense/return of higher gas volume base load (CCGT) generation

• › Expanded RET diverts development to lower gas volume peak load (OCGT) gas generation

• Utilisation of a least cost model of the National Electricity Market (NEM), publicly available assumption for new entrant and existing generators, in the absence of CPRS trajectories the second emission reduction trajectory published by the National Emissions Trading Taskforce (“States”) is used, 150mt by 2020 adjusted to reflect the NEM.

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»

East Coast Gas - Substantial Reserves & Duration Security of supply given quantum of ongoing Eastern Australia gas reserves.

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9,530 PJ
CONTRACTED RESERVES 490
16,580 PJ 460
UNCONTRACTED RESERVES
N. QLD – 950
42,650 PJ
CONTINGENT RESOURCES
TOTAL PJ: 68,760 11540
4210
28300
460
7500
920 680
Cooper - 8640 Surat-Bowen - 44050
Clarence-Morton - 300
340
3050 Gunnedah - 3390
Gloucester – 350
(180 uncontracted, 170 contingent)
Sydney - 80
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2770
210 3000
1040
420
380 50 2870
260
Otway – 1630 Bass - 730 Gippsland - 8640
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Eastern Australia 2P gas reserves and contingent resources almost 70,000 PJ, of which only ~14% are contracted:

• › Further increases are likely, particularly CSG reserves and resources

• › Supply covers current domestic gas sales (~640 PJ pa) for over 100 years

• › Could cover potential domestic gas sales and LNG exports[1] of ~1,300 PJ pa for well over 40 years

SOURCE: EnergyQuest (March: 08), AGL estimates

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1. Based on three LNG trains.

» US Investor Roadshow

Upstream Gas Interests – Permit Details

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Basin	Project	Permits	Permits	Working Interest
		Exploration (Area km2)	Production (Area km2)
Sydney	Camden Gas Project (Post SGL takeover)	PEL 2 (6,696) PEL 5 (400) - - - - -	- - PPL 1 (48) PPL 2 (1) PPL 4 (55) PPL 5 (103) PPL 6 (7)	100% 100% 100% 100% 100% 100% 100%
	Hunter Gas Project (Post SGL takeover)	PEL 4 (5,076) PEL 267 (4,913)	- -	100% 100%
Gloucester	Gloucester Gas Project	PEL 285 (1,018)	-	100%
Bowen	Moranbah Gas Project	ATP 364P (4,494) - - - - -	- PL 191 (220) PL 196 (38) PLA 222 (108) PL 223 (166) PL 224 (70)	50% 50% 50% 50% 50% 50%
	Spring Gully Project	ATP 592P (1,738) - - -	- PL 195 (257) PL 203 (259) PL 204 (220)	0.75% 0.75% 0.75% 0.0375%
Galilee	Glenaras Pilot Project	ATP 529P (5,949)	-	50%
Cooper / Eromanga	Innaminka Dome CSG Prospect Conventional oil and gas targets	PEL103 (769) PEL101 (619)	- -	37.5% 35%

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Delivering The Natural Hedge

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Rebalancing retail load & generation capabilities.

› Physical / owned intermediate & peak generation cover extreme price risk periods

› Equity investment in Loy Yang A provides natural financial hedge

Indicative AGL load 29 January 2009 & overlaying ~220mw renewables under construction

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Base Derivatives Peak Derivatives Non Dispatchable Hydro Wind
Yabulu Torrens Island B Torrens Island A Somerton
Oakey Dartmouth Eildon Kiewa
Bogong AGL Avg Load AGL Max Load Spot Price
8,000 $10,000.00
7,000
6,000 $1,000.00
5,000
4,000 $100.00
3,000
2,000 $10.00
1,000
0 $1.00
0:30 2:00 3:30 5:00 6:30 8:00 9:30 11:00 12:30 14:00 15:30 17:00 18:30 20:00 21:30 23:00
Time of Day
($/MWh)
Load & Dispatch MW
South Australian Region Pool Price
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Generation – Building a Balanced Portfolio

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Diversity mitigates market risks & benefits from a carbon constrained future.

• › Diversity of fuel type - renewables, gas & coal

• › Diversity of generation type – base, intermediate & peak

• › Diversity of geography – across all NEM states/nodes

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Generation type [1] Fuel Source [1]
Wind
7%
Coal
Peaking
18%
26%
Gas
Intermediate
51%
34% Renewables
31%
Base
33%
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1 = Owned & / or operated including plant under construction

»

Share Price

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Solid performance in a bear market.

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Market Resilience
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AGL Energy vs All Ordinaries Price Index Common Base of 100 from January 08

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125
AGL
115
105
95
85
75
65 All Ordinaries
55
45
Jan-08 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09
AGL All Ordinaries
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Economic Indicators - Australia Consumer sentiment: Australia v’s others.

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50
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Economic Indicators - Australia Growth: Australia v’s G7.

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51
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» US Investor Roadshow

Economic Indicators - Australia House prices: international comparison.

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Economic Indicators - Australia AUD / USD over last 12 months.

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53
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0.98
0.94
0.90
0.86
0.82
0.78
0.74
0.70
0.66
0.62
0.58
3/03/08 3/05/08 3/07/08 3/09/08 3/11/08 3/01/09 3/03/09
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» US Investor Roadshow

Economic Indicators - Australia RBA rate cuts flowing through.

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54
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% %
10 10
RBA cash variable mortgage rate
8 –378bps 8
standard rate, bank average
6 6
–400bps
4 4
RBA cash rate:
2 now 3.25% 2
forecast low of 2.0%
Sources: RBA, Westpac Economics
0 0
Feb-00 Feb-03 Feb-06 Feb-09
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Economic Indicators - Australia Australia’s housing stock deficiency.

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Economic Indicators

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Overhang of US homes for sale.

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