26 Review of  Operations Merchant  Energy Delivering gas and electricity to  wholesale and retail markets Energy Portfolio Management  Yesterday, today,  tomorrow... Helping an Australian icon achieve  success and sustainability. Merchant Energy manages the risks of procuring and delivering gas and  electricity for AGL’s wholesale and retail portfolios. It also manages AGL’s  compliance with mandatory renewable energy targets. From the old days of coking coal to  produce town gas, AGL has always  managed the risks of procuring and  delivering supply the changing needs of  its industrial and commercial customers.  Today the fuel sources are different as  we grow our renewable energy assets,  but the need to manage risk and change  with our customers remains. AGL’s 175 year history is rich with events that have  helped shape Australian industry. Today, AGL provides a  range of energy-related services to more than 300,000  large business customers. 2012 is a significant year for both AGL and our valued  customer Coopers Brewery as it celebrates 150 years  of operation. AGL’s relationship with Coopers Brewery  began in 2002 with the construction of a custom-built  co-generation power plant within its Adelaide premises.  The plant generates 4.4 MW of power which meets most  of Coopers’ electricity needs. This enables the production  of more than 30,000 cartons of beer each day in an  environmentally sustainable way. > Business Customers – which sells  electricity, gas and other energy  services to AGL’s large commercial  and industrial customers.  > Merchant Operations – which operates  and maintains AGL’s portfolio of  electricity generation assets including  wind farms, hydro assets and gas-fired  generation plants. > Power Development – which develops all  AGL’s electricity generation projects. > Energy Portfolio Management – which  manages procurement of AGL’s wholesale  electricity and gas requirements, including  management of the commercial aspects  of operating AGL’s own electricity  generation assets and management of  AGL’s green product obligations. > Energy Services – which provides  customers with expert advice on  a range of energy related matters,  including energy efficiency, and project  development and management. Merchant Energy’s business groups are: Energy Portfolio Management manages  the price risk associated with procuring  electricity and gas. It also manages AGL’s  green product obligations such as those  relating to the mandatory renewable energy  target, and controls the dispatch of owned  and contracted electricity generation.  Energy Portfolio Management’s operating  EBIT increased by 26.1% to $540.4 million. 