AGL has rejected the findings in the ESCOSA-commissioned report claiming the results are unrealistic and that it would address the issues raised in its submission to ESCOSA

"AGL does not accept that the preliminary findings accurately represent the realities of operating in the South Australian electricity market. AGL is committed to providing its customers with electricity at reasonable prices and has always endeavoured to ensure that its prices accurately reflect the costs incurred in delivering electricity," said general manager AGLSA Sandy Canale.

"Residential customers' bills are higher in South Australia than Victoria due predominantly to the high network charges levied on all customers. These network charges account for the major component of the average electricity bill (43%).

"Prior to the privatisation of the electricity businesses, the network assets were revalued upwards significantly. This has resulted in network charges now being 40-50% higher in SA than Victoria," said Canale.

Specifically AGL believes the report fails to recognise the full cost of wholesale electricity in the SA market, which has the greatest load variability in Australia.

In response to further comments AGL said it has managed its contracting position in SA in a prudent manner given the market risk it inherited when it bought the business in January 2000.