AGL to transform consumer business with $150m Kaluza stake

AGL Energy is set to overhaul its consumer business operations through a 20 percent stake in electricity supply and billing platform Kaluza.

AGL CEO Damien Nicks

The $150-million deal will see 4 million of AGL’s consumer electricity and gas customer services migrated onto Kaluza’s platform over the next three years.

“The technology market is changing materially with the emergence of new core utility platforms offering greater flexibility and speed, which makes it imperative to partner with industry leaders, and is why we have chosen Kaluza,” AGL CEO Damien Nicks said in an ASX filing.

“The Kaluza platform will enable new product innovation at speed, whilst at the same time materially reducing operating costs for AGL’s customer business in the future,” he added.

The investment will be in the form of preference shares and result in AGL holding a 20 percent interest directly in Kaluza, the company told the ASX [pdf].

Kaluza also handles over 80,000 customer services for OVO Energy Australia’s customer base following a migration last year.

The transition forms part of AGL’s ongoing retail transformation program which is set to cost $300 million over four financial years from July 1 2024.

According to AGL, the costs include program and change management, customer migration, systems integration and “change within supporting platforms”.

The program is intended to deliver a reduction in operating costs and capital expenditure, with pre-tax cash savings of approximately $70-to-$90 million annually from FY29.

AGL’s large business customers will be excluded from the Kaluza migration with the energy provider saying it will “continue to consider transformation options for these customers”.