The agreement also provides for an earlier-than-scheduled closure of the coal-fired power plant if it is not needed for "the reliable and secure supply of electricity in Victoria", as determined by the country's energy market operator, AGL said.
The structured transition agreement with the state provides a "higher level of certainty around the ongoing operations, future closure" and subsequent costs associated with the power station and the associated mine, AGL, which is also the country's top carbon polluter, said.
The deal provides greater clarity on avoiding an unplanned closure of Loy Yang before the scheduled date, rehabilitation of the associated mine, investment in replacing the power generation capacity, and ensuring reliable and secure power supply.
In September last year, AGL Energy brought forward the closure of its coal-fired Loy Yang power plant by a decade to 2035, buckling down to pressure from investors and lenders.
Shares of the power producer, which reported an upbeat annual underlying profit earlier this month, were trading 0.6% lower as at 0033 GMT.
