jgl complemetary to tox Jackgreen goes on dual-fuel attackWhen...

jgl complemetary to tox Jackgreen goes on dual-fuel attack

When the largest sharemarket-listed utility, Australian Gas Light, last week announced plans for a $9.5 billion demerger to improve the competitiveness of its retail arm, the smallest listed energy retailer was also talking big.
Jackgreen, which listed in December, likes to present itself as the Virgin Blue to its rivals' Qantas, saying it's leaner and lower-cost than larger players.
Now it's planning to go directly against AGL by announcing plans to offer a "dual fuel" service from January next year, after getting a licence to sell gas in NSW this week.
Using gas can further help customers become "carbon neutral" in their use of energy. Gas-fired appliances do not use electricity generated by coal-fired power stations.
The company has certainly gained support from investors, trading as high as 24.5 ? earlier this month, after an outstanding run from just 7 ? in June.
Jackgreen says it should be profitable from the first quarter of next year, when it expects to reach 25,000 customers in NSW, Victoria and South Australia.
In South Australia and NSW, it now offers both gas and electricity, and it is awaiting approval to sell gas in Victoria.
Customer numbers are expected to reach 6000 in NSW by the end of November.
Although these customers have mainly come from state-owned Energy Australia and Integral Energy, it expects to start taking more customers from AGL with its dual-fuel offering.
As the utilities sector consolidates and major companies get more aggressive, Jackgreen also announced a deal last week with investment firm Babcock & Brown that should protect it.
B&B, which already has a 10 per cent stake in Jackgreen, agreed to provide a further $5 million to act as a funding buffer when the company is trading with other utilities.
Jackgreen's chief executive, Andrew Randall, said the company's policy against its larger rivals was now one of "all-out attack". He flagged the possibility of taking Jackgreen into Queensland once full retail contestability is introduced there in 2007. The company is also looking at other non-power services to offer under its brand.
For investors, the question is whether Jackgreen will attempt to free up its share register as it matures, allowing for institutions and retail investors alike to buy in.
Apart from the B&B stake, Jackgreen's shares are owned by Mr Randall (16 per cent) and by the company itself (12 per cent).