Energy giant AGL will cut electricity prices by around nine per cent following the scrapping of the carbon tax.
Chief executive Michael Fraser said the company would cut prices by between eight and nine per cent on average and by more than 12 per cent for Victorian customers of its Powerdirect subsidiary as it passes on savings from the removal of the tax.
"It's good news for consumers ... prices will be coming off," he told AAP.
Meanwhile, the company wants to do more to keep its customers happy as it struggles to grow profits amid sliding demand for electricity.
AGL suffered a near eight per cent decline in electricity demand and a nine per cent fall in gas demand during the 2013/14 financial year.
Much of that was due to warmer than expected winters, both this year and last year, but increasing use of solar energy and the development of more energy efficient devices is also hurting demand.
The slide in demand helped push the company's underlying net profit down 3.9 per cent to $562 million for the year.
In response, it is looking to increase profit margins, which means it needs to improve customer loyalty.
"The key focus is going to be on lifting gross margins while driving customer value and loyalty," Mr Fraser said.
To do that, AGL will look to tailor products to appeal to its highest value customers and focus more heavily on its loyalty rewards program.
It will also take more of its customer interactions online, which is expected to cut costs and help to improve satisfaction levels.
But it expects to take a $200 million hit to its earnings due to the abolition of the carbon tax and associated support payments and the shutting down of its Kurnell LPG extraction plant, which is a result of the closure of Caltex's oil refinery.
The abolition of the tax hurts the value of the company's renewable energy assets and means AGL won't receive $100 million in transitional assistance payments linked to its Loy Yang power station in Victoria.
However, Mr Fraser said the end of the tax would ultimately lift the value of Loy Yang.
Meanwhile, AGL has announced a $1.2 billion capital raising to help fund its $1.5 acquisition of the NSW-government owned Macquarie Generation.
Macquarie Generation owns the Bayswater and Liddell power stations, around a quarter of NSW's energy production.
The acquisition is expected to add $74 million to AGL's 2014/15 profit.
AGL shares were placed in a trading halt while the company carries out the capital raising.
WEAK DEMAND HURTS AGL PROFIT * Net profit of $570m, up 52pct from $375m in 2012/13
* Underlying profit of $562 million, down 3.9pct from $585m
* Fully-franked final dividend of 33 cents per share, unchanged from a year ago
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