Inspiring a zero
carbon future
Annual Report and Accounts 2021
Inspiring a zero-carbon future
Jersey Electricity’s activities include the
generation, transmission and distribution
of electricity and the provision of energy
related services. As the sole supplier
of electricity in Jersey, we take our
responsibilities to our Island and its people
very seriously. We aim to create value for all
our stakeholders by investing in, developing
and operating an electricity network that is
fi t for the future, while providing aff ordable,
secure and sustainable energy for the
community and fair returns for shareholders.
We know we have a key role in Jersey’s
transition to zero-carbon and having
created a smart-enabled, low-carbon grid,
we believe Jersey can achieve zero-carbon
faster and more cost eff ectively than most
jurisdictions. We rely on the skill, experience
and commitment of a dedicated team, the
reliability of our infrastructure assets and the
faith and trust of our investors. We are ready
for the demands zero-carbon will bring. We
will continue to invest in our people and our
infrastructure to support Jersey in the global
fi ght against climate change.
Jersey Electricity KPIs
Revenue (£m)
Profi t before tax (£m)
Ordinary dividend paid per share (p)
Unit sales of electricity (m)
Lost Time Injuries
Return on energy assets (%)
Customer minutes lost
CO2 level (gCO2e/kWh)
Customer service score
Employee engagement score
2021
118.6
19.1
16.9
639
2
5.9
5
23
78
8.1
2020
111.7
14.8
16.1
619
1
6.8
5
24
77
8.3
Detail of why these items are viewed as key indicators of performance is contained in the relevant sections within the Annual Report
Our Year in Numbers
639m
UNIT SALES UP 3%
£118.6m
GROUP REVENUE UP 6%
£89.8m
ENERGY REVENUE UP 5%
£6.1m
INVESTMENT PROPERTY
REVALUATION
5.9%
RETURN ON
ENERGY ASSETS
£1.4m
PROPERTY PROFIT
EXCLUDING
REVALUATION
16.9P
DIVIDEND PAID
£1.5m
RETAIL PROFIT
UP 30%
41%*
OF JERSEY’S TOTAL
ENERGY CONSUMPTION
IS ELECTRICITY
51,912
CUSTOMERS ON SUPPLY
UP 390
807NEW SERVICES
INSTALLED
23gCO2e/KWH
CARBON INTENSITY
20,935
OFF-PEAK TARIFFS
UP 941
5
CUSTOMER MINUTES LOST
170MW
PEAK DEMAND
£89.8m
ENERGY REVENUE UP 5%
£19.8m
RETAIL REVENUE UP 11%
£1.5m
RETAIL PROFIT
UP 30%
£10.7m
ENERGY PROFIT
BEFORE TAX DOWN 13%
£19.1m
GROUP PROFIT
BEFORE TAX UP 29%
41%*
OF JERSEY’S TOTAL
ENERGY CONSUMPTION
IS ELECTRICITY
23gCO2e/KWH
CARBON INTENSITY
170MW
PEAK DEMAND
53%*
OF HOUSEHOLD ENERGY
USED IS ELECTRICITY
95.2%
IMPORTED FROM EDF
855,898
KWHS JE ON-ISLAND SOLAR
4.8%
ON-ISLAND GENERATION
(INCL 4.4% ENERGY
FROM WASTE PLANT)
347EMPLOYEES
UP 42
*Government of Jersey Energy Trends 2020 published August 2021
Contents
Chairman’s Statement
Chief Executive’s Review
Vision & Values
Our People
Diversity, Inclusion & Equality
2
4
6
8
Employee Engagement and Wellbeing
12
Customers
Price Stability and Affordability
Service Innovation
Customer Satisfaction
Supply Security
Environment
Climate: Risks and Mitigation
15
16
18
20
22
Climate: Opportunity for Energy Growth 24
Electric Transport
Health, Safety & Environment
Stakeholders
Investors
Other Partnerships
Technology
Energy
Commercial
Outlook
Financial Review
Group Risk Management
Governance
Financial Statements
1
JERSEY ELECTRICITY
26
29
30
32
34
39
40
44
48
51
55
60
86
Directors, Officers and
Professional Advisers
NON-EXECUTIVE DIRECTORS
Phil Austin MBE, FCIB, FCMI (Chairman)
Alan Bryce MSc, CEng, FIET
Wendy Dorman BA, ACA
Tony Taylor BSc (Hons)
Amanda Iceton BA (Hons)
EXECUTIVE DIRECTORS
Christopher Ambler BA, MEng, CDipAF,
CEng, MIMechE, MBA (Chief Executive)
Martin Magee CA (Finance)
SECRETARY
Lisa Floris LLB (Hons)
REGISTERED OFFICE
Queen’s Road, St. Helier, Jersey
PLACE OF INCORPORATION
Both Jersey Electricity plc (‘the Company’)
and Jersey Deep Freeze Limited (together
‘the Group’) are incorporated in Jersey.
AUDITORS
PricewaterhouseCoopers CI LLP,
37 Esplanade,
St. Helier, Jersey, JE1 4XA
BANKERS
Royal Bank of Scotland International Limited,
71 Bath Street,
St. Helier, Jersey
BROKERS
Canaccord Genuity Wealth Management,
PO Box 3,
37 The Esplanade,
St. Helier, Jersey
REGISTRAR
Computershare Investor Services
(Jersey) Limited,
13 Castle Street,
St. Helier, Jersey
Chair’s Statement
Chair of the Board, Phil Austin MBE, heads a highly
experienced team of Executive and independent non-
Executive directors in providing strategic leadership of
Jersey Electricity, within a framework of robust corporate
governance and internal controls, to promote the long-term
success of the Company.
The COVID-19 pandemic has again
brought continued challenges for
our Island community and Jersey
Electricity. Though we avoided
another total lockdown, public
health restrictions imposed by the
Government of Jersey as part of its
COVID-19 Winter Strategy continued
to disrupt life and business. As cases
escalated from the start of October
2020, working from home was re-
introduced, and non-essential retail
and social venues were closed.
The Company and its employees
again responded well and, indeed,
benefited from lessons learned earlier
in 2020 when the pandemic first
took hold. We maintained rigorous
standards to keep our people and
the community safe, while ensuring
the continuity of electricity supplies
for homes, businesses, Government,
and other essential services. New
technologies, rapidly deployed among
the workforce in the first lockdown,
are now mainstream and ensured a
seamless switch to home working,
where practicable, and continuity
of all our other business functions.
The result is that we maintained high
levels of flexibility, productivity and
performance throughout.
Performance
Revenue for the year to 30 September
2021 at £118.6m was 6% higher
than in the previous financial year.
Profit before tax for the year to 30
September 2021, was a strong £19.1m
against £14.8m in 2020. However,
if the non-cash upside from the
revaluation of investment properties
is excluded in both years, along with
the non-cash cost of £1.8m for the ex-
gratia award for pensions in service
in 2021, the underlying year-on-year
profit before tax is £14.8m in 2021
against £14.3m in 2020, an increase
of 3%.
The Board has therefore
recommended a final dividend for
the year of 10.20p, a 5% increase
on the previous year, payable on
24 March 2022.
We also continued to achieve high
levels of non-financial performance,
including our annual Customer
Minutes Lost (CMLs) figure, which is
unchanged at a low level of five CMLs,
and our independently assessed
Customer Service score, increased
to 78.4 in 2021 from 77 last year.
French fishing dispute
During the year, we have also seen an
escalation of political issues between
the EU and the UK on fishing rights
between France and Jersey, raising
questions about energy sovereignty
and the security of supply of imported
electricity between Europe and the
Channel Islands. We have taken
such matters very seriously and
have liaised closely with senior civil
servants and politicians in Jersey and
the UK. Whilst we view these matters
as being political, we have taken the
2
JERSEY ELECTRICITY
Annual Report and Accounts 2021
2
opportunity to review and enhance
our contingency plans, including
establishing arrangements to bring
additional generating capacity into
Jersey, should that be necessary. We
have fi rm contractual relationships
with parties in France from whom we
have been importing power over the
last 37 years and they have confi rmed
that such commitments to supply
electricity are robust. Furthermore,
whilst we remain compliant with
our published Security of Supply
Standard, we are currently reviewing
it in the light of the Island’s carbon
neutral ambitions and its dependency
on electricity.
Electricity markets
We have seen unprecedented volatility
in energy markets during 2021, which
has resulted in many UK suppliers
going out of business, and the Ofgem
regulated cap on UK electricity prices
rising by around 20% since April 2021.
This is expected to materially rise
again, when formally reviewed in
early 2022. Energy prices in the UK,
including gas, have risen by an even
higher quantum. We are not immune
to these conditions, but our hedging
policies have greatly sheltered Jersey
customers from the material rises
being experienced elsewhere, with
the period 2022-2024 being largely
hedged for the price we will pay for
electricity and, to a lesser extent, the
foreign exchange requirements we
need to settle such liabilities.
We announced in October 2021 that a
4% tariff rise would be implemented
from 1 January 2022, and although
this is unfortunate, it is far lower than
increases elsewhere. Even after this
rise we will continue to benchmark
very favourably against other
jurisdictions, with the UK price cap
currently being 46% higher than Jersey
Electricity’s standard domestic tariff .
Climate change
The Intergovernmental Panel on
Climate Change’s (IPCC) 2021 report
calls for immediate, rapid, and large-
scale reductions in greenhouse gas
emissions. In Jersey, the appetite
for action was apparent from the
recommendations of the Citizens’
Assembly on Climate Change, to
which we gave our full support. The
contribution of Jersey Electricity
to decarbonising electricity was
noted by the Assembly as well
as the opportunity for Jersey to
do much more. We now look to
our Government to set policies to
achieve the Island’s carbon neutrality
ambitions, to which we are fully
committed. We continue to assess
the investment needed to meet
these ambitions and we have already
started to deliver new infrastructure
to meet the forecast increase in
demand that carbon neutrality
would bring. We see this as a huge
opportunity for growth and believe
the grid is largely in place to achieve
this quickly and cost eff ectively.
Corporate governance
Last year, in line with the UK
Corporate Governance Code 2018, I
identifi ed a number of key areas of
focus for the Board in the year ahead.
I am pleased to report that we have
made good progress in all these areas
and commentary on each of them
is included later in this report, as
detailed below.
• Workforce diversity, p8, 9
• Culture and engagement, p10, 11
• Stakeholder engagement, p28
• Business effi ciency and innovation,
p32
• Risk and risk management,
p20, 21, 55
• Review of business model p23
Additionally, in accordance with the
Code’s principles and provisions,
details of the activities of the
Nominations Committee, Audit & Risk
Committee and the Remuneration
Committee are contained in their
separate reports on pages 69, 72 and
75 respectively.
The Board’s key areas of focus for
2022 are:
• Progressing stakeholder
engagement
• Extending workforce diversity
• Developing culture and
engagement
• Exploring energy sourcing
strategies to facilitate Jersey’s
net-zero carbon emissions
As indicated in my 2020 Report, Aaron
Le Cornu was retiring in March 2021
at our AGM. I would like to thank him
for his contribution to the success of
Jersey Electricity from 2011 until he
retired during this year.
Non-Executive Director Peter
Simon, who joined the Board in 2019
and sat on our Audit and Risk and
Remuneration Committees, stepped
down on 31 August 2021. I would
like to thank Peter for his insights
and expertise and for a signifi cant
contribution over the last two years.
The recruitment process to fi nd his
successor is underway.
Further information on the Company’s
Governance is detailed later in the
report, p64.
In conclusion
I’d like to conclude by thanking the
entire workforce for their outstanding
commitment and dedication, which
has delivered an excellent business
performance in very diffi cult
circumstances. Their expertise and
resilience have shone through and
they should be very proud of their
achievements.
I would also like to thank the Board
for their hard work and commitment
throughout the year, and our
shareholders for their continued
support. The coming years will have
their challenges, but there will also be
opportunities, and I am very confi dent
that the Company is well placed to
take advantage of them.
15 December 2021
Annual Report and Accounts 2021
3
Chief Executive’s Review
Chief Executive, Chris Ambler is responsible for leading
the development of Jersey Electricity’s strategy, as agreed
by the Board, and delivering JE’s Vision to ‘inspire a zero-
carbon future’. He is the leading Executive Director
responsible for all business units and all corporate functions,
including human resources, health and safety, strategy, and
sustainability. He reflects on the past year and looks at the
challenges and opportunities ahead.
Another year in which our Island and
the business have been impacted
by the COVID-19 pandemic has
reinforced the importance of our core
Values: Safety, Teamwork, Customer
Focus, Reliability, Responsibility
and Excellence. Nothing is more
important to us than the health and
safety of our people, our customers,
and the community at large. I am
therefore again very proud of the
way our people have risen to the
challenges of serving our customers,
safely and reliably throughout the
changing constraints of the pandemic,
while progressing our strategic
workstreams and completing several
milestone projects which are crucial
to delivering our Vision of inspiring a
zero-carbon future.
The flexibility and expertise of our
people, and resilience of our assets
has resulted in our joint highest
supply reliability performance since
2008, with just five Customer Minutes
Lost (CMLs)* while meeting our
second highest demand of unit sales
of 639 million, a 3% increase on last
year’s 619 million kWhs. We have
also managed to maintain prices for
customers with no tariff rise since
1 October 2020, the start of the
2020/21 financial year, at a time when
UK and European energy markets
are in turmoil. Our next tariff rise of
4%, announced in October 2021, will
come into effect on 1 January 2022,
and at a level that is well below other
benchmarks elsewhere.
Financial performance
The 2.5% tariff rise delayed from
1 April 2020 until 1 October 2020,
coupled with higher unit sales due to
home working and a colder winter
period, saw Energy revenues rise
5% to £89.8m (2020: £85.1m). Energy
profit at £10.7m, was 13% below the
£12.3m achieved in 2020, largely
due to the non-cash £1.8m ex-gratia
award for pensions in service in 2021.
Excluding this, Energy profit increased
from £12.3m to £12.5m this year.
Another strong performance from our
Retail business, Powerhouse.je, which
has risen to the challenge of COVID-19,
restricted supply chains and periods
of lockdown this year, enjoyed an 11%
increase in revenue to £19.8m (2020:
£17.8m) leading to profits of £1.5m, a
30% rise on last year.
Revenue from JEBS, our building
services business, decreased from
£3.8m in 2020 to £3.4m but was
accompanied by a profit of £0.2m in
line with 2020. Revenue in our other
businesses, at £3.3m, was above
the £2.7m delivered in 2020 with
combined profit of £0.6m
The £1.4m profit in our Property
Division, excluding the impact of
investment property revaluation,
was £0.1m higher than last year. Our
investment property portfolio moved
up in value by £6.1m to £27.8m.
Customer focus
Customer focus is not only one of
our core Values, but also a pillar of
our Vision and as such, is central
to our success. We have this year
successfully delivered three important
projects that greatly improve and
enhance our customer experience,
while also enabling us to deepen our
relationship and engagement with our
customers. In December, we launched
a new online payment platform giving
our 3,900 Pay As You Go prepayment
customers the convenience of being
able to top up their electricity meters
anytime anywhere without leaving
their homes.
The following month, we launched
a new customer-centric and mobile
compatible website designed around
well-researched customer journeys,
and at the end of March, we launched
the first version of our innovative
energy-saving app My JE. Within
five months of launch over 10,000
Islanders were using the app which
utilises and feeds back consumption
data from our Smart Meter network
to help customers better manage and
reduce their energy consumption.
Power utilities around the world
are increasingly becoming digital
businesses, offering energy
intelligence as a service and we are at
the forefront of this transformation.
The app is under continuous
development and is one of several
on-going digital projects, led by
our newly appointed Director of
Technology, that will improve our
operational efficiency and enhance
the lives of customers, helping them
on the journey to a zero-carbon
future.
Technology and social media have
accelerated the rise in customer
expectations. It was therefore
pleasing to see another strong result
in the UK Customer Satisfaction Index
(UKCSI) for the third year. A score of 78
was one point above last year and well
above the average of UK utilities.
4
JERSEY ELECTRICITY A second pillar of our Vision is
therefore to be an Employer of
Choice in Jersey. To achieve this, our
strategy has been and continues to
be to invest resource in our Employee
Value Proposition, with an emphasis
on employee wellbeing, training and
development, family friendly policies,
promoting diversity and inclusion and
nurturing the right culture to enable
everyone to thrive and give their best.
Employees are important
stakeholders who can shape a
business. It is important that our
people are truly representative of
the community we serve. Greater
diversity leads to greater innovation,
creativity and mutual understanding.
This fuels debate, aids problem
solving and leads to better decision
making. As a result, Jersey Electricity
is a dynamic business and our future
looks bright on the journey to zero-
carbon which will benefit the
future of all Islanders.
Road to carbon neutrality
Beyond COVID-19, climate change
is the greatest challenge to us all.
Following the Government of Jersey’s
declaration of a climate emergency
in May 2019, the Island held its first
Citizens’ Assembly on Climate Change
this year in which we played an active
role, making the case for how we
believe Jersey can achieve carbon
neutrality quickly and more cost
effectively than most other countries.
We are encouraged to see that the
Assembly’s recommendations, are
very much aligned with our Vision,
and showed that there is a clear
appetite for change among Islanders.
We aim to be at the forefront of that
change, helping and supporting all
Islanders on the journey. We now
await the Government of Jersey’s
Carbon Neutral Roadmap, due at
the end of 2021, to see which of the
Assembly’s recommendations it
intends to pursue in policy.
Zero-carbon will bring an increase
in both electricity peak demand
as well as a considerable increase
in electricity consumption, from
current levels. We have studied
various scenarios and have evaluated
the infrastructure requirements to
support a zero-carbon Jersey and we
know what investment in the network
is needed.
Importantly, with a long-term
strategy for decarbonisation in place
from Government, we believe this
investment can be staged in such
a way that can avoid significant
increases in electricity prices because
our network will benefit from
economies of scale.
Our people and culture
We cannot achieve our Vision without
a motivated and engaged workforce
which understands and is committed
to that Vision. Recruiting and retaining
the most committed employees is key.
Annual Report and Accounts 2021
5
Vision
& Values
Our Purpose is to
‘enable life’s essentials’
We do this by providing the
people of Jersey with secure,
reliable, aff ordable and
sustainable electricity today
and long into the future.
Our Vision is to
‘inspire a zero-carbon future’
We are creating opportunities
and solutions for customers,
giving them confi dence that
everyone can embrace a
sustainable future.
We want to serve our community
and be the energy partner of
choice in a net-zero Jersey and
we fully support the Island’s
ambitions to become carbon
neutral by 2030.
Our strategies for achieving
this include:
• Enabling customers to convert domestic
and commercial premises to value-for-
money, low-carbon electric heating and
cooling solutions
• Developing local, aff ordable renewable
energy for anyone who wants it
• Developing e-mobility and EV charging
solutions to encourage more effi cient,
electric transport
• Providing integrated services ‘beyond
the meter’ that put customers at the
heart of the energy system
• Leading in the application of technology
to benefi t customers by providing better
and new services as well as improving
the effi ciency of our business
• Creating value for all stakeholders,
including providing a fair return for
shareholders
• Developing a well-invested network
and a highly skilled, diverse and
engaged workforce committed to
a zero-carbon future.
6
JERSEY ELECTRICITY
Customers
We put customers at the
heart of our business, giving
them choice, control, and
value-for-money in a transparent
and trusted way.
Environment
We support the Government’s
carbon neutrality objectives by
growing electricity’s share of
the energy market, reducing
carbon emissions, helping
to conserve resources
and protect the
environment.
Our Vision is to
‘enable life’s essentials and
inspire a zero-carbon future’
Lifestyle
We aim to enhance the lifestyle
of Islanders and power the economy
by providing innovative, low carbon
energy services and solutions.
Our People
We aim to be an employer of choice
in Jersey, where employees are engaged,
supported, and developed.
Investors
We provide fair returns to our investors
over the medium to long term.
Technology
We aim to be leaders in the
application of technology,
enhancing efficiencies, unlocking
new services, and digitally enabling
our employees and our customers.
Partnerships
We aim to be the partner of choice
for the Government of Jersey and
the Island’s parishes, supporting
all their energy needs.
Vision
&
Values
Our Values are key to our culture
and describe the behaviours
we always expect of each other:
Safety
We do everything safely and
responsibly or not at all – nothing
is more important than the safety
of the public, our customers,
and our people.
Reliability
We are trustworthy, dependable,
and reliable, delivering on our
commitments and always there
when our customers need us.
Customer Focus
We listen to our customers
and seek to understand and
respond to their needs, treating
them the way we would wish
to be treated, with respect and
honesty.
Teamwork
We value diversity and respect
and value our colleagues as
individuals and we believe
we are stronger as a team,
leading to better solutions
and a more enjoyable and
rewarding work life.
Excellence
We continuously strive to work
in a way that is both innovative
and simple to deliver cost
effective solutions.
Responsibility
We accept responsibility for
everything we do, safeguarding
the natural environment and
the local community, as well
as the interests of all our
customers and people.
Annual Report and Accounts 2021
7
Our People
Diversity, Inclusion and Equality
Vision Pillar – OUR PEOPLE: ‘We aim to be an employer of choice in
Jersey, where employees are engaged, supported and developed.’
Stakeholder engagement is vital to a successful and sustainable
business, infl uencing strategy to create value for everyone touched by
our business. It starts with our people. We strive to be an ‘Employer of
Choice’, a ‘Great Place to Work’ and a ‘High Performing Organisation’,
where employees feel truly included, valued, and supported to
perform at their best. Director of Human Resources Andrew Welsby
outlines JE’s people strategy and initiatives to help the business achieve
these goals.
The year has seen an unprecedented high level of
recruitment across the business not only to support our
succession planning, but crucially to prepare the business
and the Island for a zero-carbon future. We increased our
head count by 42 during 2020/21 bringing the total number
of our workforce to 347 (FTEs), including an apprentice
intake of nine across our Energy Division and JEBS, our
Building Services arm.
Complementing traditional skills, which will always be
needed for hands-on work on the network, the skills
we need are becoming more diverse: data analysts,
product developers and renewable power specialists.
As power utilities increasingly become digital businesses,
off ering exciting energy intelligence-related services and
products, we are recruiting innovative thinkers; people
with adaptable mindsets and fresh ideas about how new
digital technology can be used to enhance our services to
customers.
Diversity and Inclusion
We believe that a diverse workforce with an inclusive
culture is a key building block to successfully delivering
our Vision. Diversity and Inclusion (D&I) has, therefore,
become a strategic imperative that enhances our Employee
Value Proposition. We feel it is vital for the success and
sustainability of the JE business that our workforce fairly
represents our diverse Island community.
8
JERSEY ELECTRICITY
347
TOTAL EMPLOYEES (FTEs)
15
NATIONALITIES
REPRESENTED
13
APPRENTICES
90
WOMEN EMPLOYED
13
WOMEN EMPLOYED
IN ENERGY ROLES
3
WOMEN IN SENIOR
LEADERSHIP TEAM
44
AVERAGE
EMPLOYEE AGE
13.5
YEARS
AVERAGE SERVICE
To establish workforce sentiment towards inclusivity
within JE, we partnered with a specialist D&I
organisation, Inclusive Employers (IE), to canvass
our people on how we’re performing. Whilst we have
many opportunities to further develop our inclusivity
credentials, we are pleased to report that IE recognised
a step change improvement this year.
We have established a D&I Group of employees to
discuss and contribute to our strategies and initiatives.
We have followed last year’s Unconscious Bias Training
among senior managers and recruiters with a series of
‘Managing Diversity and Inclusion’ workshops conducted
by Liberate, a charity that promotes equality and
diversity across the Channel Islands, with the aim of
building management awareness of D&I and JE’s specific
strategy for the coming three years.
We have learned over the past 18 months that our
employees can be productive in different ways and
we are open to finding flexibility in our work practices.
Direct conversations with our people show that we are
continuously improving the visibility of D&I initiatives
and there is positive change happening in all areas.
Our recruitment strategy now guarantees an interview
to anyone with a disability, if they meet the minimum
requirements for the role.
In February 2021, we introduced Equality Impact
Assessments in all our business cases with the support
of partners IE. This acts as a tool to help us consider
people with protected characteristics at an early stage
in every project and when creating strategy, business
cases, plans and propositions. To mark our achievements
in this area, we became gold sponsors of Liberate’s
Channel Islands Pride event.
At the end of the financial year we celebrated National
Inclusion week internally across the business, with
promotions, activities, workshops, webinars and
podcasts which we hope will drive us on next year to
become a truly diverse and inclusive employer – an
‘Employer of Choice’ for all.
Annual Report and Accounts 2021
9
Our People: Diversity, Inclusion and Equality continued
Equality Impact Assessment Case Study 1
‘Easy Access’ EV charging
Our Equality Impact Assessment of the refurbishment
of charging bays at our Queen’s Road underground car
park concluded that it was possible to do even more
to support young families and wheelchair users by
designating a proportion of these spaces as ‘Easy Access’.
We made them wider than traditional bays by converting
three former bays into two, allowing easier access for
prams, buggies and wheelchairs. By also lowering the
height of the charging points at the ‘Easy Access’ bays we
maximised inclusivity for all users. The Equality Impact
Assessment also identified that the car park was not
well-lit. We therefore upgraded the lighting and painted
the walls white to improve visibility in the charging bay
area to ensure everyone using them feels safe.
Equality Impact Assessment Case Study 2
Jersey Electricity new website
Our new website, launched at the
start of 2021, deploys the latest
technology to promote inclusivity. The
Equality Impact Assessment resulted
in support for people with visual
impairments to navigate our site
using audio rather than visual cues;
a variety of colour themes are easily
configurable to support people with
colour blindness as well as a tool to
increase and reduce font size on
every page.
We have also enabled the site to be
configured in over 50 languages,
ensuring Islanders from, we hope,
all ethnic backgrounds can easily
engage with us. We also recognised
that imagery plays a role in creating a
feeling of inclusivity therefore images
for the site were commissioned
to show a wide range of lifestyles,
gender, relationships and social
interactions. Several employees
are included on the careers pages
to demonstrate that we welcome
diversity as an employer.
OUR WEBSITE
IS AVAILABLE
IN OVER
50LANGUAGES
The Equality Impact Assessment resulted in support for
people with visual impairments to navigate our site using audio
rather than visual cues.
10
JERSEY ELECTRICITY Our new website, launched at the
start of 2021, deploys the latest
technology to promote inclusivity.
Annual Report and Accounts 2021 11
Our People continued
Employee Engagement and Wellbeing
Wellbeing
To feel valued and inspired to perform
at their best, our people also need
to feel physically and mentally well.
Safety is one of our six core Values
and reinforces the importance of
health and wellbeing. We have a
robust Occupational Health and
Safety Management System (OHSMS),
in place and a very constructive and
open Health, Safety and Environment
(HSE) culture. Safety representatives
from across the business support
a dedicated HSE team to create a
culture of open and constructive
discussions as well as a culture for
safe working among colleagues,
contractors and the public.
We recognise that good mental health
can be as important as good physical
health. We have invested considerably
to support our people in many ways.
This has been particularly evident
during the challenges of the pandemic
when wellbeing was a larger than
normal issue and management
support of even greater importance.
Wellbeing has also proved a key driver
of employee engagement in our
employee surveys of 2018-2021. To
assess our position as an organisation
when benchmarked against others,
and identify opportunities to further
support our people, we conducted
a Wellbeing Assessment this year.
It consisted of a questionnaire to
measure people’s wellbeing and the
important role that employers have.
By understanding how our employees
are feeling, we can drive positive
actions to promote wellness and
understand what we need to do
to continue to be an Employer of
Choice in Jersey. Questions covered
confidence, coping, drivers of stress,
response to stress and resilience. We
were encouraged to see that 81% of
respondents felt that they were able
to adapt to changes ‘most or all the
time’ and 70% indicated they can
‘deal with whatever comes their way’.
Also pleasing was that a significant
proportion of employees (73%), who
undertook the assessment, feel happy
and content, and that their work and
the organisation was contributing
towards their feelings of happiness.
Almost 80% recognised that JE invests
in wellbeing and that it is part of our
Vision and business objectives.
Employee engagement
We now have a Culture and
Engagement Forum consisting of a
panel of employees from all major
departments, plus Board member
participation, to discuss JE’s current
culture and any engagement issues.
We gain further insight from surveys.
Following our COVID-19-specific
survey of April 2020, we conducted
our broader Employee Engagement
Survey in the summer of 2021. The
result puts us in the top quartile of
utilities that use the same survey
provider.
It is vital the companies not only ask
employees their views, but also act
upon them.
Our people said:
• They wanted to be more connected
to our Vision. So, we created our
Super Zero Hero campaign to
showcase what employees are
doing to reduce carbon emissions
and encourage biodiversity. We
also introduced an employee e-bike
loan scheme and further financial
incentives for those purchasing
low-emission vehicles.
• They said they wanted to put
back into the community. So, we
sponsored the Mourier Valley
Restoration Project with the
National Trust for Jersey, creating
opportunities for employees to get
involved. We also sponsored Child
Accident Prevention (CAP) Safety
12
in Action where employees teach
primary school children about home
and electrical safety.
• They asked to hear more about our
vacancies. So, we now promote
vacancies even more internally
through our internal Facebook page
PowWow and Teams channels,
enabling more people to move and
progress within the organisation if
they wish.
• They said they wanted more
information about other business
areas. Now each unit contributes
to a monthly TeamTalk document,
presented at Team Briefings and
also displayed on the Teams channel
to keep everyone up to date with
what the business is doing.
• They said that having high quality
changing and drying facilities were
essential to the working day. So,
we re-designed the facilities at La
Collette Power Station to make
them more modern and more
convenient.
• They said a clearer understanding
of our reward and recognition
process was important. We created
individual Reward Statements and
are now in the process of creating
training and information-sharing
programmes.
• They called for subsidised yoga
and other fitness schemes. With
COVID-19 restrictions lifted, we re-
introduced yoga sessions alongside
subsidised Active membership to
several gyms and sports facilities.
JERSEY ELECTRICITY Our people policies:
• Compassionate Leave
• Dignity & Work
• Diversity & Inclusion
• Domestic Emergencies
CONFIDENTIAL
ASSISTANCE
PROGRAMME
UNUM
YOGA
• Gender Transition Sexual Orientation Policy
FREE HEALTH CHECKS
• Flexible Working
• Learning & Development
• Parental Leave
• Stress Related Illness
• Wellbeing
SUBSIDISED GYM
MEMBERSHIPS
SUBSIDISED
MEDICAL
INSURANCE
11 MENTAL
HEALTH FIRST
AIDERS
FREE HEALTHY
SNACKS
FINANCIAL
WELLBEING
Annual Report and Accounts 2021 13
Customer focus and fi rst-class service are at the heart
of everything we do across the business. Whether it is
a developer looking for a large new supply, a domestic
customer fuel switching or simply moving house, or a new
customer shopping for a new appliance in our Powerhouse
retail store, all our people take great pride in striving to meet
or exceed their expectations in their every dealing with us.
Vision Pillar – CUSTOMERS: ‘We put customers at the heart of our
business, giving them choice, control and value-for-money in a
transparent and trusted way.’
14
JERSEY ELECTRICITY
Customers
Price Stability and Affordability
Vision Pillar – CUSTOMERS: ‘We put customers at the heart of our
business, giving them choice, control and value-for-money in a
transparent and trusted way.’
All our research consistently shows us that price and price stability
are the two most important factors of our service offering to
our customers. With the trebling of wholesale electricity prices
hitting consumers in other jurisdictions hard this year, maintaining
competitively priced power continues to be a key focus of Jersey
Electricity. Finance Director Martin Magee outlines the challenges his
team faces and the strategy to overcome them.
All energy companies are faced
with the ‘trilemma’, balancing the
needs and risks of supplying low-
carbon, sustainable electricity, while
maintaining supply security and
affordability. Jersey Electricity is no
exception.
The latter months of the financial
year saw unprecedented increases in
European wholesale electricity prices,
which more than trebled year-on-
year. At year end, baseload prices
for 2022 were €135/MWh compared
with €47/MWh last year, increasing
by 25% in just one week at the end of
September 2021.
Double-digit rises in the UK
In the UK, escalating gas prices, low
wind generation, fire damage to the
landing site of a major undersea
supply cable and further ‘green
levies’ have combined to cause
double-digit electricity price rises,
with more expected to follow.
Ofgem, the UK energy regulator,
raised its price cap by a further 12%
from 1 October 2021, following a
9% rise in April 2021. This means an
average UK consumer on a standard
variable tariff has seen an increase
of over 20% in power prices this
past year. It means the regulated
electricity tariff in the UK is 46%
higher than the standard domestic
rate in Jersey, and analysts predict
a further double-digit rise in the UK
price cap in April 2022.
We have had no tariff increases in
Jersey since the start of the financial
year, having deferred last year’s 2.5%
rise due in April 2020 by six months
to 1 October 2020 to help those
affected financially by the pandemic,
at a cost to the Company of £1m.
Considering prevailing wholesale
prices, the Board has, however,
sanctioned a 4% tariff increase to
take effect on 1 January 2022. This
rise will be only the fourth in Jersey in
seven years and will add around 80p
a week to the average domestic bill.
We have been able to shield Islanders
from the worst effects of this period
of unprecedented energy market
volatility due to our hedging policy.
We imported 95% of the electricity
requirements of Jersey from Europe
this year, jointly purchasing this
power with Guernsey Electricity, from
EDF in France.
Our agreement with EDF combines a
fixed price component with a market-
related mechanism that allows us
to lock in some price certainty over
a rolling three-year period. The
goal is to provide our customers
with a market-based price but with
a degree of certainty in a volatile
energy marketplace. Our electricity
purchases are materially, albeit not
fully, hedged for the period 2022-24.
We also enter forward currency
contracts to reduce exposure and
to aid tariff planning. The average
Euro/Sterling rate underpinning
our electricity purchases during the
financial year, because of the hedging
programme, was €/£1.12, slightly
below the average €/£ rate during the
financial year of around €/£1.14.
Tariffs continue to
benchmark well
This strategy has the goal of ensuring
that our tariffs benchmark well
against other jurisdictions. Even when
the 4% rise is considered in January
2022, the UK price cap, the price of
power to an estimated 40% of all UK
households, will be 41% above our
standard tariff, with a further UK
increase likely in April 2022.
In addition, our import strategy
has already helped us to virtually
decarbonise Jersey’s electricity
supply which means prices in Jersey
are not subject to the green tax
levies imposed in the UK as it strives
to decarbonise its supply to meet
carbon neutrality targets.
Annual Report and Accounts 2021 15
Customers continued
Service Innovation
Customer expectations have risen significantly in recent years, driven
in part by social media and new technologies, which are transforming
the way power utilities operate. To meet these expectations and
help Jersey transition to a zero-carbon future, we have re-aligned
and expanded our teams to meet these new demands. Head of
Customer Experience and Communications Stuart Murphy reports
on our progress.
We seek to listen to our customers,
and, where possible, act to deliver
the services they need. So, when
our pre-payment customers called
for the ability to top-up online, we
developed a solution. This was
just one of three digital projects
completed this year that have truly
enhanced our customers’ experience
by giving Islanders more convenience
and control, while also deepening our
relationships with them.
Online pre-payment
In December 2020 we launched an
online prepayment portal,
Topup.je, that enables our 3,900
Pay As You Go (PAYG) customers to
top up their meters online anytime
without having to leave their
homes. We partnered with Payzone
and CityPay to develop the digital
payment system that gives our PAYG
customers more convenience than
ever before. Crucially, the timing also
gave reassurance to those forced to
self-isolate or who were reluctant to
go out in the climate of the pandemic
as last winter approached.
New user-friendly website
launched
One month later, we launched a
brand-new customer-centric website,
designed to enhance customer
journeys in all online dealings with
us. The branding reinforces our
Vision to inspire a zero-carbon future,
it’s mobile compatible and easy to
navigate.
Visits to the site have increased
by over 51% year-on-year, with
222,335 sessions recorded between
1 October 2020 and 30 September
2021. Users of the site increased by
almost 50% to over 128,000 in the
same period. Importantly, by making
it easier for customers to contact
us with a prominent ‘click for a call
back’ or ‘click to email’ up 348% and
174% respectively, has enabled our
Customer Care Team to manage
enquiries in a more timely manner
and dedicate more time and resource
to those with the most complex
enquiries.
In keeping with our ethos to
be a diverse and fully inclusive
organisation, the site has been
designed to be accessible to visually
impaired customers to ensure they
have a good user experience and are
able to easily access our information.
Energy Saving app My JE
We understand customers want more
choice and control. So, an important
milestone in our progress to be
leaders in technology has been the
launch of our free energy-saving app
My JE. This leverages the data Smart
Meters collect for the benefit
of customers.
Developed by our own in-house billing
provider JENDEV in partnership with
Eliq, a leading Swedish provider of
energy insights and mobile utility
company apps, My JE app uses Smart
Meter data to show customers how
much electricity they are using in cash
as well as kWhs (units), helping them
to budget day by day or week by week.
WEBSITE USERS UP
50%YEAR ON YEAR
172,000
WEBSITE SESSIONS
RECORDED BETWEEN
1 JAN- 30 SEP
WEBSITE VISITS UP
51%YEAR ON YEAR
16
JERSEY ELECTRICITY The app also allows customers to:
•
•
•
View bills, transactions and
account balances
Set up a profile to compare
electricity usage with other
similar properties
Set a weekly or monthly
consumption target with
notifications to help control costs.
Within six months of its March 2021
launch, My JE had been downloaded
by over 10,000 Islanders – around a
quarter of our domestic household
customer base – and the feedback
continues to be extremely positive.
Before year end, we launched
an updated version for desktop
computers which also had a new
forecasting feature that predicts
future use, providing time for
customers to make adjustments.
The daily forecasting feature uses
algorithms that test and evaluate
thousands of combinations of data
points to predict customers’ future
electricity consumption based on
their past and current usage. It can
prepare customers for the size of
their quarterly bill before it arrives
and show if their Direct Debit
payments are keeping pace with their
consumption. If not, customers can
make payment adjustments early or
reduce electricity usage.
Monthly forecasting predicts how
energy consumption is likely to
change during the next 12 months.
For example, if a customer recently
started to charge an EV at home.
Further planned development of
the app in the coming year includes
access for Pay As You Go Customers,
those customers generating solar
power on our Buy Back Tariff and
larger commercial customers as we
continue to introduce technological
and digital advancements for the
benefit of all our customer base.
Within 6 months
of its launch,
My JE had been
downloaded
by over
10,000
Islanders
That’s
around
1/4
of domestic
households
Annual Report and Accounts 2021 17
Customers continued
Customer Satisfaction
It’s critically important for businesses to
understand their customers. We measure
our success and obtain insights to improve
service delivery, through research, including
surveys and focus groups. This year we
completed 13 focus groups on various
topics and undertook nine surveys. Our
participation in the UK Customer Satisfaction
Index (UKCSI), in particular, enables us to
benchmark ourselves against larger UK
utilities and identify our strengths and areas
for further improvement.
We are delighted to report an excellent result of 78.4 for
this our third year taking part in the UKCSI. This is 1.4 up
on last year and puts Jersey Electricity in the top quartile
of UK utilities which were covered in the survey. Our result
was above the all-sector average of 77.4 and above the UK
utilities average of 73.5. In the power utilities sector, only
Octopus Energy, and UK Power Networks scored higher.
We also scored highly in the customer priority areas
of Experience (79.9), Customer Ethos (76.8), Emotional
Connection (76.2) and Ethics (76.2). The priority area for
improvement was Complaint Handling (56). We will now
further utilise our membership of the Institute by adopting
its recommendations on complaint handling strategy,
accountability, complaint channels and increased training.
UK Customer Satisfaction Index (UKCSI)
JERSEY ELECTRICITY
(2020: 77.0)
78.4
ALL-SECTOR AVERAGE
(2020: 77.0)
77.4
UTILITIES
73.5
(2020: 72.6)
Jersey Electricity would sit in 5th position
out of 34 UK utilities in the Index
18
JERSEY ELECTRICITY
EASE OF DEALING WITH AN ISSUE
COMPETENCE OF STAFF
BILLING
HELPFULNESS OF STAFF
PRODUCT/SERVICE RELIABILITY
OUTCOME OF COMPLAINT
HANDLING OF COMPLAINT
ATTITUDE OF STAFF
SPEED OF RESOLVING COMPLAINT
2021
2020
2019
2021
2020
2019
2021
2020
2019
2021
2020
2019
2021
2020
2019
2021
2020
2019
2021
2020
2019
2021
2020
2019
2021
2020
2019
30
40
50
60
70
80
83
81
80
84
82
80
85
83
83
84
82
81
84
83
82
54
58
38
56
60
37
59
70
48
56
61
41
Service delivery
As well as our domestic customers we also ran a survey
among over 600 of our trade allies and property owners
this year – those who had either applied for a new service,
a meter connection or a temporary isolation of supply – to
gauge how our Service Delivery Team was performing and
identify any area for improvement.
The results were encouraging with 98% of respondents
saying the necessary forms were easy to find and the vast
majority finding them ‘easy’ or ‘very easy’ to complete.
We received strong ratings for interactions with the team,
with only 4% rating their experience poor. Timelines for
work were explained clearly for 78%, and 94% were aware
how much notice is required for meter installations.
However, we feel there is an opportunity for even better
communication in this area.
We intend to:
• Benchmark ourselves against quote acceptance and
service connection with UK utilities
• Ensure all interested parties feel engaged and
properly briefed and consulted
• Introduce clear customer flow diagrams with
timescales clarified and explained
• Review our Electricity Supply Enquiry (ESE) and
Metering Forms to ensure they continue to meet
our future customer needs
Annual Report and Accounts 2021 19
Customers continued
Supply security
The wellbeing and comfort of Islanders and Jersey’s multi-billion
pound economy rely on a secure energy supply. Operations Director
Mark Preece outlines our strategy and performance.
As the sole supplier of low-carbon electricity, we know we have a huge responsibility to our
community. As the Island transitions to a zero-carbon future and our share of the energy
market increases, that responsibility will become even greater.
Our reputation and standing with
the Government of Jersey and
Islanders depends on us maintaining
a consistently good record on supply
security. That is why we invest to
ensure our infrastructure is securely
designed, well maintained and that
our people are trained to respond to
adverse events quickly if they do occur.
We measure supply reliability in
Customer Minutes Lost (CMLs) which
is the established industry measure in
use around the world. This represents
the total supply interruption time
in minutes experienced by each
customer on average in a year. This
year, our CMLs were the same as
last year at just five, making it our
joint best performance in 11 years
during which we have consistently
outperformed larger UK distributors
who averaged 80 CMLs in 2019-20*.
To ensure supply security, we first
have to ensure enough capacity to
meet demand. Our three supply links
to France have now been operating
together for five years, giving us
a maximum importation capacity
of 202MW. This is well in excess of
our record peak demand of 178MW
recorded in March 2018. We also
operate these interconnectors in the
most secure configuration so that if
one were to develop a fault, the load
would seamlessly switch to the
other two.
We also maintain and regularly test
generation assets at La Collette
Power Station and Queen’s Road as
added security in the unlikely event of
disruption to our imports.
Such disruption has been threatened
this year as the Island’s imported
power supplies (along with the UK’s
imported supplies) became a target of
political comment in the post-Brexit
French fishing licences dispute.
French fishing boats blockaded St
Helier Harbour in May 2021 over the
licences’ dispute and during that
protest, French National Assembly
Minister of the Sea Annick Girardin
threatened to switch off the power
supply to the Channel Islands.
20
JERSEY ELECTRICITY Four months later, on 18 September,
with a resolution to the dispute
yet to be finalised, fishermen from
Normandy and Brittany staged a
further protest on beach at Pirou,
France, where our 100MW Normandie
3 (N3) supply cable comes ashore.
Jersey Electricity and Guernsey
Electricity have a joint importation
agreement in place with French
supplier EDF until 2027. Jersey
Electricity and Guernsey Electricity
maintained regular contact with
our French partners throughout
the fishing dispute to ensure that
electricity supplies to the Channel
Islands were maintained.
The dispute, which is a matter for
the various governments to settle,
remained unresolved at year-end
and supplies in Jersey had not been
disrupted because of it. However, we
have taken the opportunity to review
and enhance our contingency plans,
including establishing arrangements
to bring additional generating
capacity into Jersey should that be
necessary. Furthermore, whilst we
remain compliant with our published
Security of Supply Standard, we are
also in the process of reviewing this
standard in light of Jersey’s carbon
neutral ambitions and the expected
increased use of electricity in Jersey.
*Source: Ofgem
SUPPLY
SECURITY
STANDARD
Jersey Electricity’s system
is designed to meet an
‘adapted N minus 1 security
standard’ as follows:
• A one-in-eight-year winter
peak demand
Customer Minutes Lost
• All normal load in the event
Year
Minutes
of the loss on the single
largest interconnector with
France (N minus 1) plus a
simultaneous failure of the
largest:
- Diesel generator; and
- Gas turbine
• 75% of peak winter load for
48 hours from on-Island
generation (no simultaneous
loss of on-Island capacity)
• No coincidence of the above
2021
2020
2019
2018
2017
5
5
6
6
8
Annual Report and Accounts 2021 21
Environment
Climate Risks and Mitigation
Vision Pillar – ENVIRONMENT: ‘We support the Government’s carbon
neutrality objectives by growing electricity’s share of the energy
market, reducing carbon emissions, helping to conserve resources and
protect the environment.’
CEO Chris Ambler assesses the risks
and opportunities climate change and
the transition to net-zero present to
the business.
Climate change, and measures
and policies introduced to combat
it, present businesses with many
challenges which could aff ect their
fi nancial performance by impacting
the value of assets and future
cash fl ows.
The Taskforce on Climate-related
Financial Disclosures (TCFD) seeks
more transparency from companies
on the risks and opportunities they
face, either directly or indirectly due
to the climate emergency and the
transition to net-zero, to help investors
judge which companies are most at
risk and which are best prepared.
The new rule on the TCFDs
recommendations took eff ect in
January 2021 for UK premium listed
companies (aff ecting our reporting
next year for 2021-22). Jersey Electricity
supports these recommendations and
will fully comply.
Leader in carbon reduction
Jersey Electricity has been a leader
in carbon reduction since it set a
strategy in the late-1970s to tap
into France’s low-carbon electricity
supply instead of generating on-
Island using oil. Today, with three
interconnectors to France, Jersey
imports 95% of its electricity from
certifi ed low-carbon nuclear (66%)
and certifi ed hydro (34%) sources.
This has been the main driver of a 36%
reduction in Jersey’s overall emissions
since 1990 despite a 60% increase in
electricity consumption. In addition,
this year almost one million kWhs of
on-Island generation came from our
community-scale solar arrays as we
introduce solar power to the grid in
increasing volumes.
Signifi cant investments in further
smart grid infrastructure, means
Jersey now benefi ts from a virtually
completely decarbonised electricity
system, calculated at just 23gCO2e/
kWh for 2020/21, something the
UK is unlikely to achieve for at least
20 years.
Clear appetite for net zero
The Citizens’ Assembly on Climate
Change held in Jersey earlier this year
and to which we made a wide range of
submissions, showed clear appetite for
zero-carbon, recommending a target
date of Carbon Neutral by 2030. Post
issue of this report, the Government
of Jersey is expected to publish its
JERSEY IMPORTS
95%OF ITS ELECTRICITY
FROM LOW-CARBON
SOURCES
66%FROM NUCLEAR
34%FROM HYDRO
*Department for Business, Energy and Industrial Strategy Greenhouse Gas Reporting - Conversion Factors 2020
**Building Bye-Laws (Jersey) Technical Guidance Document 11.1B 2016
22
JERSEY ELECTRICITY
Carbon Neutral Roadmap, before the
end of 2021, outlining which of the
Citizens’ Assembly recommendations
it intends to take forward.
While the transition to carbon
neutrality presents us with significant
opportunities compared with many
companies to which it will come at a
significant cost, it is not without risks.
Significant increase in demand
We have already mapped out various
scenarios, calculated the investment
needed and have workstreams in
progress to prepare the network
to meet an estimated increase in
electricity peak demand and annual
consumption.
Though we believe we can make
this investment without significantly
driving up electricity prices, such a
strong position in the energy sector
could lead to increased scrutiny and a
heavier regulatory regime. This may
put at risk the Company’s ability to
earn a return on such an investment. If
this were to happen, this could become
a distraction for management, hamper
future investment and lead to higher
costs to the business and therefore
higher prices to customers, noting
that retail electricity prices under the
current self-regulatory environment
are some of the lowest in Europe.
We have also initiated a review of our
current business model from being
a virtual 100% importer of electricity
from Europe. Our initial conclusions,
that will continue to be explored over
coming years, is that an offshore
wind development in Jersey waters, if
economically viable, and acceptable
to our customers, could supplement
our existing arrangements. Initial
discussions on planning dynamics,
and seabed leasing rights, have
been initiated with the Government
of Jersey, but these are still very
embryonic.
Mitigating the risks
To mitigate the risks of the net-zero
transition, we regularly engage
with Government and other key
stakeholders, and closely monitor
future Government policy so senior
management can develop appropriate
strategies and solutions for example,
network reinforcements, increasing
and training manpower to carry out
fuel conversions, developing more EV
charging and e-mobility propositions.
We also mitigate the physical risk
to the Company of climate change.
Although the Government has already
drafted a Shoreline Management
Plan in response to the impact of
rising sea levels, we have always
considered flood risk when siting
major infrastructure.
We have carried out further studies
based on the Shoreline Management
Plan, which have confirmed that our
Archirondel site, which connects
Normandie 1 and 2, is not at risk
in the immediate future. This work
has, however, informed us that the
Government of Jersey should consider
some additional mitigation when
the electricity assets at this site
need replacing.
The strategic hub of our 90kV
network and connection point for our
Normandie 3, South Hill Switching
Station is sited high on Mount
Bingham. St Helier West Primary
Substation is a considerable height
above St Aubin’s Bay. Western Primary
is on high ground by the airport in St
Peter, while Rue des Pres Primary is a
considerable distance inland.
Our Powerhouse headquarters and
Queen’s Road Primary that houses our
emergency gas turbine generators
are also on an elevated part of
St Helier.
In France, the ‘fascines’, installed in
2019, to mitigate shoreline erosion
on the beach at Surville, where our
Normandie 1 and 2 cables connect
to the RTE network, appear to be
performing well and have arrested the
erosion of the sand dunes and raised
the sand level over the cables.
We also build resilience through
supply diversity, have comprehensive
insurance in place and regularly test
our business continuity plans against
various scenarios.
Importing low-carbon
power sources has been
the main driver of a 36%
reduction in Jersey’s overall
emissions since 1990
despite a 60% increase in
electricity consumption.
Annual Report and Accounts 2021 23
Environment continued
Climate: Opportunity for Energy Growth
Growing electricity’s share of the energy market has been a long-
standing priority for the business. Today, it is crucial to helping
Jersey achieve its carbon neutrality ambitions and play its part in
the global fight on climate change. Director of Commercial Services
Peter Cadiou updates on progress and future plans.
Around 70% of the world’s economy
is now committed to reaching net-
zero. Jersey’s Government declared a
climate emergency in 2019 and with it,
the ambition for the Island to become
carbon neutral by 2030. It’s Carbon
Neutral Roadmap will set out how the
Island will achieve this. We believe
that although this is an immensely
challenging target, it could be done
faster and more cost effectively than
many other countries by displacing
the use of fossil fuels, particularly as
used in the high emitting sectors of
heating and road transport, with low-
carbon electricity.
We are prepared for the challenge.
We have long been committed to
switching customers from gas and oil-
fired heating systems to low-carbon
electric. Our Energy Solutions team,
dedicated to load growth and fuel
switching, has doubled our rate of
conversion in the past five years. This
year, the team achieved its highest
target ever of 316 fuel switches and,
following the double-digit rise in
Jersey gas prices, we expect more to
follow. We are now developing new
24
24
JERSEY ELECTRICITY
JERSEY ELECTRICITY solutions to address new challenges
and to make it easier for others to
switch from fossil fuels.
The future of electricity
We have increased the team and re-
structured as we develop and build
out our skills in the exciting space of
energy and service innovation. We
see the creation of more intelligent,
electrifi ed, and carbon-neutral energy
systems through new products and
propositions that join power, heat,
and transport together as part of an
integrated future of electricity. For
example, combining solar, battery
storage, heat pumps, smart digital
platforms and electric vehicles.
Innovative options
We have created a New Product
and Proposition team to focus on
innovative and commercially viable
solutions for customers with cash
constraints and with ambitious
carbon reduction targets. A new Sales
and Delivery team will deliver these
innovative propositions into market.
We are building relationships with
public and private stakeholders to
devise bespoke funding models
to make it easier for businesses
and public sector consumers such
as the Parishes, which own large
community buildings and housing
stock, to convert from fossil fuels.
Low carbon capital projects can be
repaid via innovative subscription or
fi nancing options, which simplify the
customer experience, removing risk
and shorter-term cash pressures. The
teams are working hard to develop
new propositions, including more
subscription-based service off erings,
which will be launched in the year
ahead.
As the complexity of fuel switches
increases, particularly in the area
of heat pump installations, we are
training and recruiting to provide
the necessary expertise. JEBS,
our Building Services arm, which
undertakes the works, has now been
aligned with Solutions’ corporate
objectives and strategies.
Total customers
51,912
+390
Total customers on
discounted tariff s
20,935
+941
Total customers on E20
3,564
+1,032
This year the Energy
Solutions team achieved
its highest target ever of
316 fuel switches
We are training/recruiting
to provide the neccessary
expertise for complex
fuel switches
We are devising bespoke
funding methods to make
it easier for businesses to
convert from fossil fuels
Annual Report and Accounts 2021 25
Environment continued
Electric Transport
As the emitter of 44% of the Island’s overall carbon emissions, transport, particularly road
transport, is a huge carbon reduction opportunity in Jersey, where driving distances are
short, and the electricity supply is already decarbonised. Research shows average ‘lifecycle’
emissions from electric cars are up to 70% lower than petrol cars* in countries such as
Sweden and France where, like Jersey, most electricity comes from renewables and nuclear,
and around 30% lower in the UK.
Going forward, as now, we expect
most EV owners to charge overnight
at home. We are also working hard
to make that easier for potential
owners. Following a successful trial
in collaboration with 30 EV owners,
we are now looking to launch an all-
inclusive home charging solution next
year that provides the charger and
installation, maintenance and
overnight, off -peak electricity for a
fi xed monthly subscription.
We also continue to partner
businesses and developers to increase
EV charging accessibility as we move
to a zero-carbon future.
We are seeing that growth, albeit
still slowly. At year-end there were
1,261 all-electric vehicles registered
in Jersey, up 426 on last year. Of these,
1,112 were cars and vans. Hybrid
vehicles have also increased by 485
to 1,694.
Electric vehicles total on Jersey Register at year end 2021
197VANS
915CARS
47WORKS TRUCKS
102MOTORCYCLES
1,261TOTAL
Up 426 on last year
*Source: www.exeter.ac.uk/news/research/title_783082_en.html
Jersey’s Citizens’ Assembly on Climate
Change recognised the potential
carbon savings from road transport
in its recommendations published in
June 2021, urging a ban on the sale
of new fossil-fuel-powered vehicles
from 2025.
The climate emergency, Jersey
Government’s carbon neutrality aims
and improved battery technology,
have made more people consider
making their next car an EV, and we
want to remove as many barriers as
we can by having the infrastructure in
place to meet demand.
Meeting growth in demand
In 2020/21 we installed more public
Evolve charging bays than in any
previous year, increasing the total
from 53 to 95 at year-end. This gives
Jersey more public chargers per capita
than the UK. Our own Queen’s Road
site alone now has 13 public charging
bays, showcasing the complete range
the Evolve network off ers, from 7kW
and 22kW wall-mounted chargers,
a 22kW pedestal charger and
one of the Island’s three 50kW
Rapid chargers.
We are also future-proofi ng
installations to make it easier to
expand as demand grows. For
example, we have installed 11
charging bays at Goose Green. Of
these, six are currently dedicated
for EV use only, while the other fi ve
are part of a dual-use trial with the
Government of Jersey and could
become dedicated for EV use when
demand grows.
26
JERSEY ELECTRICITY
Annual Report and Accounts 2021 27
We also recognise the importance of good
mental as well as physical health. Our HSE
Team, working with HR and our team of 11
Mental Health First Aiders has continued to be
vigilant and ready to help colleagues suff ering
anxiety or other signs of mental stress as
COVID-19 has continued to aff ect our lives.
28
JERSEY ELECTRICITY
Environment continued
Health, Safety & Environment
Safety is one of our core Values: ‘We do everything safely
and responsibly or not at all – nothing is more important
than the safety of the public, our customers and our people.’
Following the unprecedented
challenges presented by the onset of
the COVID-19 pandemic last year, our
activities have again been affected
by COVID-19 and Government
restrictions. The Health, Safety and
Environment (HSE) Team, in particular,
along with Human Resources (HR),
has ensured we not only complied
with Government guidance, but
went above and beyond what was
required to minimise the risks posed
by COVID-19 to our employees,
contractors, visitors and members of
the public.
For example, a significant proportion
of the works to install a new 75MVA
90/33 kV transformer at La Collette
were carried out by off-Island
contractors. In addition to adhering
to the restrictions and conditions on
entry to the Island, we implemented
further stringent working practices,
including the establishment of a work
team bubble, and separate mess
facilities to further protect our people
and the public at large while ensuring
work proceeded.
Action to mitigate risk
We have always followed a ‘risk-based’
process to HSE. We address new
and revised legislation and adapt
to operational environments as we
have with COVID-19. We ensure all
employees are fully competent in
the work we ask them to do and,
importantly, that they recognise
their own limits of competency.
We also expect them to proactively
identify hazards through regular
risk assessments and take action to
mitigate the risks associated with
those hazards in their day-to-day work.
Technology is also beginning to play
a bigger part in HSE as we further
utilise Office 365. This year saw the
launch of our Site Inspection App
which enables a more systematic
approach to capturing and monitoring
HSE trends, allowing better reporting
and identifying of opportunities for
improvement. We have also increased
the number of site inspections of all
areas of JE conducted by all levels of
management to continue to promote
a positive and open HSE culture
throughout the business.
Culture for safe working
We have a vigorous Occupational
Health and Safety Management
System (OHSMS), in place which we
continue to develop to meet the latest
ISO standards. Safety Representatives
support our dedicated HSE team
throughout the business and do
much to create a distinctive and
constructive culture for safe working
among colleagues, contractors and
the public.
We also recognise the importance
of good mental as well as physical
health. Our HSE Team, working with
HR and our team of 11 Mental Health
First Aiders have continued to be
vigilant and ready to help colleagues
suffering anxiety or other signs
of mental stress as COVID-19 has
continued to affect our lives.
Externally, and as the Island’s
respected authority on electricity
and energy, we have continued to
work closely with the Health and
Safety Inspectorate (HSI) and Jersey
Construction Council (JeCC) to
reinforce key safety messages to the
community at large.
We achieved the renewal of the
Government of Jersey’s Eco Active
Leader status for 2021 and underwent
another British Safety Council Five
Star Environmental audit at year end.
We have also created an Environment
and Sustainability Committee
consisting of representatives from
across the business to develop our
sustainability strategy and provide
oversight of environmental and
sustainability initiatives across JE.
Lost Time Injuries
We have traditionally recorded Lost
Time Accidents (LTAs) in this report as
an accident that results in the injured
person being away from work or
unable to do their normal work for
more than three days – in line with
historical industry standards. This
year, to align LTA reporting with
that of our internal HSE Committees
and Board Report, the Executive
Leadership Team has agreed to
standardise LTA reports as Lost Time
Injuries (LTIs) that result in an injured
person being away from work or
unable to do their normal work for
one or more days, excluding the day
of the accident. This year we had
two LTIs and ten days lost under
this revised definition, and we have
restated the number of LTIs, and the
number of days lost for the previous
four years.
Year
2017
2018
2019
2020
2021
Lost Time
Injuries
Days
Lost
1
3
1
1
2
1
9
4
7
10
Annual Report and Accounts 2021 29
Stakeholders
In line with the UK Corporate Governance Code 2018, we
have this year further built on the Code’s recommendations
by increasing our focus on stakeholder engagement.
Constructive engagement with stakeholders enables us
to better understand stakeholder needs and better meet
them, creating value for the business and the community in
the process.
Our stakeholders are people or
organisations with an interest in our
Purpose, Vision, our operations, and
our actions, or who may be aff ected
by them. As the sole supplier of
electricity in Jersey, our stakeholders
are broad and varied and go well
beyond our shareholders. We see
stakeholders as our customers,
suppliers, partners, NGOs,
Government, parishes, regulatory
bodies, lenders and investors – as
well as of course our employees.
We continue to regularly engage with
organisations such as Age Concern,
Citizen’s Advice Bureau and the
Consumer Council on issues around
vulnerable customers, prices and
energy effi ciency. Our Chairman,
CEO and Financial Director also
have regular meetings with both
Government and independent
shareholder representatives. How
we engage with our people and our
customers are detailed elsewhere in
this report.
In addition to these groups, we
have this year identifi ed a further 17
stakeholder groups with an interest
in the Company and have reached
out to engage at a deeper level. This
has helped them fi rstly to understand
what we stand for as a company and
where we are going in the future
and secondly, to gain insights and
perspectives from these groups to
better guide our own strategy and
product or service development and
associated decision making.
Method of engagement
In order to engage with each of
these groups in the most relevant
way, and to prioritise our approach,
we classifi ed each cluster by the
perceived urgency of their needs,
their levels of interest and depth of
relationship with us.
At year end, our Executive Leadership
Team had conducted 93 such stakeholder
engagements, helping those aff ected by
our business to better understand Jersey
Electricity. We have further measures
planned in the coming year.
30
JERSEY ELECTRICITY
Outcomes
We have strengthened our
relationships with the parishes
by launching our Parish Earth
Partnership. This is a joint
environmental initiative between
Jersey Electricity and the 12 parishes
and is designed to make a positive
difference for sustainability in Jersey
by planting trees and shrubs to
absorb carbon, increase biodiversity,
and trigger community environmental
action. We have also been able to
expand our public EV charger network
into all but one parish at year end.
We are now also helping most
parishes reduce their carbon
footprint by advising on fuel
switching community buildings and
housing stock.
At year end, our Executive Leadership
Team had conducted 93 such
stakeholder engagements, helping
those affected by our business to
better understand Jersey Electricity.
We have further measures planned in
the coming year.
We initially focused on Government,
the parishes and our top 30
commercial customers in terms of
consumption. We compiled a team
made up of our Executive Leadership
Team members supplemented
by other business-specific Senior
Managers when appropriate, to meet
with and present to these groups.
Our engagements with the
Government included topics such
as the Island’s current and future
energy mix, supply security, the
role of electricity in support of the
Government’s carbon neutrality
ambitions and our ability to
support the transition to net-zero.
Engagements with commercial
customers included discussions
on: carbon reduction, green tariffs,
embedded generation and the value
of lost load.
Annual Report and Accounts 2021 31
Investors
Vision Pillar – INVESTORS: ‘We provide fair
returns to our investors over the medium
to long term.’
As the sole provider of electricity in Jersey, with a 41%*
share of the energy market, we are acutely aware of our
responsibility to our community and we seek to deliver high
quality services to our customers and community whilst
creating value for our shareholders in a transparent, fair
and sustainable manner. We do this by developing and
innovating the Island’s electricity network, investing in it and
operating it as efficiently as possible.
Our business model does not seek to
maximise profits by driving up prices.
Instead, we take a long-term view
of our business and the service we
provide to our customers – focusing
on being cost effective and efficient
whilst at the same time managing
risk. We seek to deliver a sustainable
‘return on assets’ that is consistent
with the rate of return of typical
regulated entities in the UK and a
return that enables the Company to
continue to borrow and invest for the
future. Our target return on assets
employed continues to be in the 6%-
7% range over the medium-term and
was 5.9% in 2021 against 6.8% in 2020.
The network effect
As a network operator, a significant
portion of our costs is fixed.
That is, they are costs we have to
bear however much electricity is
distributed across the network.
The demand for electricity varies
significantly within each day and
from month to month and season
to season. Those fixed costs need
to be borne to meet a given winter
peak demand. The more units of
energy that are distributed across
the network, therefore the more
efficient it becomes to operate due to
economies of scale and the unitisation
of fixed costs. This helps us to
maintain competitive prices.
The retail price of a unit of electricity
in Jersey is made up of the cost of
producing electricity, whether that
be procured from France, the Energy
from Waste plant or by our own
on-Island generation, the cost to
maintain and run the transmission
and distribution networks, and thirdly,
the retail unit price includes a fair
‘return on assets’ to provide dividends
to shareholders who enable us to
finance, acquire and maintain assets.
Our ‘return on assets’ has typically
been between 6% and 7%. This
level is in line with utilities in other
jurisdictions. The rates each utility
can charge include a return on the
physical assets they build, operate
and maintain.
Once we have covered our fixed and
variable costs, including the costs
of financing any investment in the
grid and other assets, payment of
dividends and taxes, any surplus
returns from higher sales are passed
back to customers in the form of lower
prices. This is a major benefit of the
electrification of Jersey and Carbon
Neutral 2030.
It is essential to have the confidence
of both shareholders and lenders to
raise investment for the long term.
Our pricing model seeks to provide
stable risk-adjusted returns on capital
for our shareholders who know and
understand the risk profile they
are buying into through their share
ownership.
Robust, reliable network
This confidence of investors – both
shareholders and lenders – enables us
to make long-term strategic decisions
and considerable investments in
infrastructure. This, in turn, ensures
we can deliver a robust, reliable
network, now and for the future.
Dividends paid this year, net of tax,
rose by 5%, from 16.05p in 2020 to
16.90p in 2021. The proposed final
dividend for this year is 10.20p, a 5%
rise on the previous year. The final
dividend will be paid on 24 March
2022 to those shareholders registered
on 18 February 2022.
We seek to deliver a sustainable ‘return on assets’ that is
consistent with the rate of return in the UK and enables the
Company to continue to borrow and invest for the future.
*Government of Jersey Energy Trends 2020 published August 2021
32
JERSEY ELECTRICITY It is essential to have the
confi dence of both shareholders
and lenders to raise investment
for the long term.
Annual Report and Accounts 2021 33
Other Partnerships
Vision Pillar – PARTNERSHIPS: ‘We aim to be the partner of choice
for the Government and the Island’s parishes, supporting all their
energy needs.’
Our partnerships, however, go well beyond this as we seek to create value across our
community in many ways beyond delivering our core business activities. We do this through
our corporate sponsorship programme and the CSR (Corporate Social Responsibility)
activities of our people.
We focus our support on charities,
organisations and local causes that
concentrate their activities on health,
education and the environment.
One relationship in particular that
embraces both the environment
and education is with our long-term
partner the National Trust for Jersey
which shares our Vision for a zero-
carbon future.
We support the Trust’s important
Education Programme by sponsoring
its full-time Education Officer for three
years to the end of 2022. Around
3,500 children a year engage with the
programme which involves activities
that complement schools’ science
curricula and encourage children to
‘reconnect with nature’. Under the
banner ‘We Have the Power’, the
programme aims to raise awareness
of the causes of climate change and
the impacts such as biodiversity loss
and how to prevent this.
Showcase at COP26
The programme has also given
rise to the exciting and innovative
Power Rangers initiative in Jersey.
Backed by the United Nations and
headquartered at the ‘Climate Hub’
we helped to create at the Trust’s
historic Le Moulin de Quétivel, Power
Rangers is a young environmentalists’
club through which participants
work towards official YUNGA (Young
United Nations Global Alliance)
Challenge Badges. A film about
Jersey Power Rangers was shown at
34
JERSEY ELECTRICITY the UN Climate Change Conference,
COP26, in Glasgow as part of a series
by the International National Trusts
Organisation to showcase the climate
work of trusts across the world.
Our second significant sponsorship
with the Trust, also in its third year, is
the reforestation of Mourier valley in
the North of Jersey by planting 6,000
trees over three years. In partnership
with Jersey Water, we are co-funding
and physically helping to plant 20 acres
with the Trust and Jersey Trees for Life.
Despite COVID-19 restrictions we were
able to return in smaller groups to help
plant a further 2,300 trees during last
season’s planting window.
This year we announced another
environmental project in partnership
with the 12 parishes by investing
£60,000 (£5,000 per parish) to create
densely planted areas of trees and
shrubs. The aim is to engage the
community as volunteers, contribute
to carbon sequestration and increase
biodiversity over the long term. At year
end, 10 parishes had found suitable
land, three had gained the necessary
planning permissions and planting is
expected to start in two parishes in
the coming planting window.
We are in the final
year of a three-year
project with the
National Trust for
Jersey to reforest
Mourier Valley by
planting 6,000
trees over 20
acres to contribute
to carbon
sequestration
and increase
biodiversity.
Annual Report and Accounts 2021 35
Other Partnerships continued
Recognising environmental
excellence
We were delighted that the
presentations for two JE-sponsored
environmental awards were finally
able to take place in 2021. Jersey
Mencap won the sixth Pride of
Jersey Environmentalists Award
for its La Ferme Pond Project
which enhances biodiversity and
provides work experience for
Islanders with a learning disability.
At the Jersey Construction Council
Awards, the re-development
of La Vieille Êcole collected our
Sustainability Award.
Sponsored by JE
Jersey Mencap won the sixth Pride of Jersey
Environmentalists Award for its La Ferme Pond Project
which enhances biodiversity and provides work
experience for Islanders with a learning disability.
Sustainability Awards
Child Accident Prevention
36
JERSEY ELECTRICITY A donation of an electric
bike helped Brightly
raise almost
£20,000
to support care
experienced youngsters
Support for charities
We continued to support Family
Nursing and Home Care whose Colour
Festival had to be cancelled for a
second year due to COVID-19, and
when Sanctuary Trust had to cancel its
Walk Into Light we instead, supported
its 10th Anniversary Challenge. A
donation of an electric bike again
helped Brightly raise almost £20,000
to support care-experienced
youngsters, and we supported one of
our employees on a cycle ride
from Land’s End to John O’Groats by
matching the funds he raised and
bringing the total to almost £1,500 for
Autism Jersey.
We promote home and electrical
safety among school children by
supporting Child Accident Prevention’s
Safety In Action weeks during which
10 employees took time out to stage
inter-active workshops for 2,000
children at Highlands College over 16
days in July and September.
Our Monthly Staff Charity Draw
continues, raising over £5,000 for
employee-nominated local charities
with donations paid directly from
salaries. This year’s beneficiaries
were: Brighter Futures, Jersey
Brain Tumour Charity, Jersey Child
Care Trust, Helping Wings, Philip’s
Footprint, Move on Youth Project,
Jersey Lifeboat Association, Cancer
Research UK Jersey, JSPCA, Donna
Annand Melanoma Charity, Multiple
Sclerosis Society of Jersey and Jersey
Hospice Care.
Annual Report and Accounts 2021 37
We aim to exploit technology
at every opportunity to improve
network reliability, reduce
operating costs and build
capacity for the future.
38
JERSEY ELECTRICITY
Technology
Vision Pillar – TECHNOLOGY: ‘We aim to be
leaders in the application of technology,
enhancing efficiencies, unlocking new
services, and digitally enabling our
employees and our customers.’
Director of Technology
Werner Bornman
assesses our progress.
We have seen earlier in this report
how we are developing and deploying
new technologies and leveraging the
immense amount of data from Smart
Meters to better understand and
serve our customers and enhance
their lifestyles, with the My JE app,
Topup.je and a new, customer-centric
website.
For the business, technology brings
opportunities and efficiencies in the
short and long term. We aim to exploit
technology at every opportunity to
improve network reliability, reduce
operating costs and build capacity
for the future to meet the changing
needs of our customers and Jersey’s
carbon neutrality ambitions. We
therefore continue to automate
processes, integrate our operations
and monitor the changing technology
landscape – and are constantly
looking to showcase new technologies
offering our network as a testbed for
international developers.
Smart meters
We are leveraging state-of-the-
art, cloud-based analytics services
to securely process anonymised
data sets provided by our Island-
wide roll-out of Smart Meters. This
data provides insights that enable
us to understand the loading and
operation of our networks and help
infrastructure investment decisions
more fully. This is particularly
important given the high cost of
infrastructure and the need to invest
with discipline, yet ensure that Jersey
is fully prepared for the increased
demand a carbon-neutral Jersey
will bring.
Microsoft Office 365
The Microsoft Office 365 deployment
completed before the 2020 COVID-19
lockdown has enabled the business
to pivot to a remote, mobile and more
flexible workforce. Office 365 provides
an integrated communications
platform and secure access to
information for engineers and other
employees who work out in the field.
This enabled the continuation of
multiple workstreams and contributed
to the maintenance of a reliable
energy network and supply during the
lockdown and subsequent COVID-19-
related workplace restrictions.
WAMS
We are in the process of implementing
a new Work and Asset Management
System (WAMS), utilising a class-
leading Enterprise Asset Management
platform. The WAMS project aimed
at yielding optimum operational
efficiency from our industrial
workforce as well as move forward
our maintenance programmes both
on the distribution network and
production plant located at La Collette
Power Station. WAMS will eventually
help us to identify ageing areas of the
network that can be pre-emptively
maintained or replaced before failure.
Our Generation team is already using
the solution with the remainder of
the Engineering team set to go live
in 2022.
ArcGIS
We are also in the process of
migrating our current cable records
and operational distribution/
transmission schematics to a new
world leading ESRE (3D) Geographical
Information System called ArcGIS.
This new drawing package will
enable accurate and live data that
will be accessible in the field to our
engineers. ArcGIS will also have
good integration with our other new
systems like WAMS, will provide us
with more accurate network statistics
and will greatly assist in our drive
towards a zero-carbon future.
Mobile devices
We have already started the roll out
of mobile devices to our industrial
employees in preparation for both
WAMS and ArcGIS. Our teams will
also be able to access service-critical
information out in the field, greatly
improving communications especially
when issues arise. Direct inputting of
data into the system by our industrial
staff, as well as supervisors and
engineers, will streamline processes
and capture more data than ever
before.
Annual Report and Accounts 2021 39
Energy
Vision Pillar – LIFESTYLE: ‘We aim to enhance
the lifestyle of Islanders and power the
economy by providing innovative, low-carbon
energy services and solutions.’
This starts with the provision of
electricity supply. Operations Director
Mark Preece reports on the activities
of our Energy Division.
Demand
Unit sales volumes increased by 3%
from 619 million to 639 million kWhs
due to colder than normal weather,
combined with many customers
continuing to work from home, due
to COVID-19. The latter is reflected in
units billed in the residential sector
increasing by around 8% in 2021, but
falling around 2% for commercial
premises, compared with 2020.
Imports from EDF accounted for
95.2% of our electricity requirements
this year (639GWh). We generated
only 0.4% on-Island from our solar
and diesel plant. The remaining 4.4%
of supplies (30GWh) came from the
Government-run Energy from Waste
(EfW) Plant. A particular cold February
was reflected in our peak demand for
the year of 170MW being recorded on
11 February 2021. This is well above
last year’s 141MW but below our
record of 178MW set in March 2018.
Renewables
Although a third of electricity
consumed in Jersey is already from
certified French renewable hydro
sources, we now have almost a 1MW
of local solar generation connected to
the grid, following the commissioning
of the two largest arrays in the
Channel Islands at Jersey Dairy and
Woodside Farm, Trinity.
The 2,500 square-metre, 553kWp
array on the roof of Jersey Dairy and a
1,311 square-metre 255kWp array on
a warehouse roof at Woodside Farm
went ‘live’ in February 2021, providing
Jersey annually with 750,000 units
of on-Island-generated renewable
electricity for at least the next 25
years.
Combined with earlier arrays we
installed at the Power Station and
Queen’s Road Solar Hub, local solar
installations are producing enough
electricity to power around 135 homes
a year using an average 7,300 kWhs
(units).
Although local solar will not in
itself reduce the carbon content of
electricity in Jersey, we recognise the
appetite for local renewables among
Islanders, and we will continue to
bring it on to the grid in increasing
volumes to further diversify our
energy mix.
Negotiations are underway on plans
for our first commercial-scale ground-
mounted solar farm, and we have
more than 30 further sites, with the
potential to generate over 6MWp,
under consideration in the pipeline.
Local solar installations are producing
enough electricity to power around 135
homes a year using an average 7,300 kWhs
40
JERSEY ELECTRICITY Although 1/3 of electricity
consumed in Jersey is from
imported renewable sources,
we now have almost 1MW of
local solar generation connected
to the grid.
Annual Report and Accounts 2021 41
Energy continued
Generation assets
Maintaining our generation assets at La Collette Power
Station and Queen’s Road is also vital for supply security
(as detailed on page 21) in the event of disruption to
imports. This year, we have carried out a major overhaul of
the 33kV switchboard at La Collette which is a key element
of the generation capability of this site. We have also
maintained other generation assets in accordance with
the required regimes.
We have planned and installed further mitigation to
provide resilience against political threats to supplies from
France, following the post-Brexit fishing licence dispute.
This work forms part of a wider plan to deal with this
unlikely eventuality and was carried out in a very short
time period, with cable and plant suppliers delivering the
required items ahead of normal lead times.
Transmission
Despite COVID-19 restrictions, we have made good
progress on the installation of the 75MVA 90/33 kV
transformer at La Collette. This has included installation
of the 90kV cabling to South Hill Switching Station,
with associated modification of the gantries on which
these cables are installed. Similarly, the 33kV cabling
which required modification of the 33kV switchboard to
accommodate the cables, has been completed.
The protection and control systems have been delivered
and are being commissioned. We anticipate this will
be completed in Q1, 2022 to provide resilience in the
transmission network for Winter. This will further reduce
reliance on local generation using oil in the event of
network faults and help facilitate the retirement of ageing
33kV cable assets. The resilience that the completion of the
La Collette transformer project provides, means the works
on the existing transformer can proceed with minimal risk
in Spring 2022.
Electricity Sources 2020/2021
+0.2%
YEAR
JE
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2.5%
20.7%
14.9%
1.4%
2.9%
1.5%
0.2%
0.3%
0.2%
0.4%
+0.5%
Import
92.3%
75.4%
80.2%
94.0%
91.6%
92.0%
94.9%
94.1%
94.7%
95.2%
EfW
5.2%
3.9%
4.9%
4.6%
5.5%
5.8%
4.9%
5.6%
5.1%
4.4%
-0.7%
COVID-19 constraints
COVID-19 has been a great challenge to our operations
and maintenance activity, which have been busier than
ever. A significant proportion of the works were carried out
by off-Island contractors, and restrictions on entry to the
Island placed considerable constraints on certain activities.
We have also implemented our own restrictions to further
protect our employees but in a way in which the work could
still proceed safely.
The installation of the 90/11 kV transformer at Queen’s
Road has not progressed as anticipated due to our projects
team concentrating on the La Collette project and its
We have planned and installed further mitigation to provide
resilience against political threats to supplies from France,
following the post-Brexit fishing licence dispute.
42
JERSEY ELECTRICITY associated COVID-19 complications
however, we expect to commence the
civil works and tendering for the key
elements of plant next year.
Distribution
The completion of our Smart Meter
roll-out has allowed us to use the data
this system provides to understand
the loading and operation of our
networks more fully. By developing
user-friendly solutions that enable
our people to use this data, we can
connect new load, with less risk,
maximising previous investments.
We have commenced a project to
plan for the demands a zero-carbon
future will put on our networks and
our people. We will be examining
anticipated loadings from customers,
from heating and electric vehicles,
and evaluating the spare capacity on
our existing networks, to calculate in
increasing detail the likely investment
required. The time scales and details
will be dependent on the Government
of Jersey’s Carbon Neutral Roadmap
and subsequent polices. We have
identified key information technology
projects needed to provide data in a
structured manner and integrated
with other information sources to
provide reliable results.
We are also recruiting additional
engineering staff that specialise in the
strategic development of networks to
ensure we have the skill sets required
to meet the future requirements.
Annual Report and Accounts 2021 43
Commercial
Our other businesses, complement our primary business
of Energy and align their activities with our Group Purpose
and Vision. Retail by making energy efficient appliances and
low-carbon heating solutions available to Islanders, JEBS
are instrumental in fuel switching and expanding the EV
charger network. Jersey Energy is at the forefront of modern
environmental building services design, and Jendev supports
our technology projects, including our Smart Meter roll-out
and subsequent app design.
Powerhouse.je
Buoyed by a record-breaking start to
the financial year, our Retail business
the Powerhouse store and its online
arm, powerhouse.je continued to
perform well throughout the past 12
months despite COVID-19 restrictions.
Revenue increased 11% from £17.8m
in 2020 to £19.8m, resulting in a rise in
profits of 30% from £1.2m to £1.5m.
The exceptional trading performance
was achieved by a combination
of customer focus, maintaining
stocks under increasing supply
chain pressures and our ability to
continue trading, both in-store when
competitors were closed, and online
with either fast home delivery or click
and collect when we were forced to
temporarily close or restrict numbers
in the store.
Buoyant trading in October 2020,
assisted in part by the Government of
Jersey’s scheme to boost the economy
post-COVID lockdown by giving every
Islander a £100 to spend locally, was
maintained throughout the year
as COVID-19 continued to affect
spending, for example, due to less
travel taking place out of the Island. It
did, however, briefly adversely affect
the business in November.
44
Resilient trading
Following one employee testing
positive for COVID-19, the store was
closed for two days for deep cleaning
but we were able to continue trading
online. We have invested in our
ecommerce platform, enhancing
services such as free home delivery
and click and collect, and securing
new product lines when many
competitors were closed.
The Powerhouse was able to remain
open during the Government’s
winter COVID-19 circuit-breaker that
closed non-essential retail and social
venues. We took extra precautions,
however, by restricting the number
of customers in the store to equal the
number of sales assistants on shift.
We did not permit general browsing,
giving us extra control and time to
clean thoroughly between customers.
We set up a Sales Office to cope with
telesales and remote support. Four
people moved from the shop floor to
answer phone queries and support
remote sales online by phone. We
began year-round Sunday trading
for the first time and recruited nine
additional people to cover the extra
hours and demand.
Adapting to supply chain
pressures
Like every retailer in our sector, our
supply chain is still under enormous
pressure. Generally, stock at the
suppliers is still in short supply, and
manufacturers compete globally for
components, particularly microchips.
Many factories are still affected by
lockdowns and social distancing, plus
many imports are experiencing delays
and increased costs because of the
shipping container crisis. As a result,
we have been unable to source our
usual volumes of key products such as
PlayStation.
We have adapted by changing
our ordering patterns by forward
ordering our core range of TVs and
major appliances to secure supply for
the next six months. Our strategy has
been to reduce focus on the width of
stock available and concentrate on
having good stock depth of a core
range of products.
This year we have further diversified
into new categories and expanded
our range of e-mobility products
in support of the corporate Vision
of inspiring a zero-carbon future.
We plan to launch new brands and
subcategories and provide new
services in the smart home area.
The Powerhouse has an ambition
to be recognised as one of the best
independent electrical retailers in the
British Isles. This year, the team was
rewarded by winning three awards:
PC Retail (Best Independent Retailer),
Innovative Electrical Retail (Best
Superstore Showroom), and Best
Domestic Appliance Retailer. Though
the challenges of COVID-19 continue
to affect the retail sector, we have
proved time and again over the past
18 months that our people are able to
adapt and continue to serve Islanders.
JENDEV
Since 1998, our in-house digital
solutions business Jendev has
developed and supported Jersey
Electricity’s corporate systems.
Jendev provides digital solutions for
all business areas (including third
parties), delivering a mix of standard
and bespoke systems. As a core
business capability, they help the rest
of the Company develop and deliver
improving business process efficiency
and customer experience. The team
is not only an important internal
resource, the Company has monetised
JERSEY ELECTRICITY this capability by offering solutions
to multiple external customers in the
utility industry and beyond.
Jendev continues to support external
clients, whilst remaining focused on
supporting Jersey Electricity’s digital
projects. Jendev also continues to
develop its utility billing product,
Jenworks, powered by Dynamics
Business Central.
Jendev provides the Group with
easy access to the required digital
skills, including business analysis,
consulting, design, development,
training and project management
which is utilised on a number of
key corporate projects. Jendev
specialises in Microsoft Dynamics
business applications but has the
implementation expertise required to
deliver projects across a wide range of
technologies.
Having this team in the Group allows
Jersey Electricity to maintain agility,
responding quickly to new business
challenges and opportunities.
Powerhouse.je
revenue increased
11% from £17.8m
in 2020 to £19.8m,
resulting in a rise in
profits of 30% from
£1.2m to £1.5m
Annual Report and Accounts 2021 45
Commercial continued
Jersey Energy
Jersey Energy and Guernsey-based,
Channel Design Consultants, provide
premium environmental and building
services advisory, design and site
administration services to architects,
the Government of Jersey and States
of Guernsey, Parish Halls and private
developers. Established in 1994 to
promote energy and environmental
solutions in building design and
energy related services, the teams’
expertise is in much demand today
as the islands look to transition to
net-zero.
The financial year started with an
office move for Jersey Energy in an
effort to cut costs. With the lease
expiring on existing premises at CTV
House, La Pouquelaye, we identified
a suitable space at La Collette Power
Station and the move took place in
October 2020.
The construction industry continued
to recover and adapt to new working
practices imposed by COVID-19
restrictions only to be forced into
another lockdown and homeworking
arrangements in the New Year.
General projects and workstreams
were not affected as adversely as by
the original 2020 lockdown as the
teams were able to continue working
on projects with the appropriate safe
working measures in place.
By the middle of the year things were
again returning back to normal but
now the construction industry was
busier than before with a backlog
of existing projects and new ones
42NEW CHARGING
BAYS IN 2021
46
feeding into the system as part of the
Government of Jersey’s fiscal stimulus
workstream support package.
Jersey Energy were awarded some of
the stimulus works from successful
competitive tender submissions.
One is the trial of providing a
new Passivhaus development for
Andium Homes. This involves the
implementation of a very efficient
design and construction with low heat
losses, heat recovery heating and
ventilation solutions. This is seen as
the way forward for the construction
95TOTAL
of new properties as Jersey moves
to carbon neutrality and is being
considered for future Building Byelaw
Regulation updates.
Jersey Energy also won the contract
for the services provisions for the new
Albert Pier marina facilities, which
are designed for high-end vessels.
These provisions are of a much
higher specification than standard
marina facilities and provided a new
design challenge for the team, with
regulations and standards not found
on onshore projects.
Jersey Energy has continued to
provide vital support to Energy
Solutions’ electric vehicle charging
network expansion by designing the
infrastructure for a record annual
total of 42 new charging bays,
bringing the total a year end to 95.
Recruitment in this highly specialised
and skilled area continues to be a
challenge for Jersey Energy due to
the high cost of living in Jersey and its
housing restrictions.
JERSEY ELECTRICITY Property
Our Property portfolio includes
a B&Q store and Medical Centre
situated on our Powerhouse retail
and administration offi ce site at
Queen’s Road as well as 29 private
houses and fl ats that are rented on
the open market. Commercial tenants
leasing parts of the Powerhouse
building are SportsDirect, which
shares the ground fl oor with our
own retail business Powerhouse.je,
and telecoms operator Sure, which
occupies the middle fl oor. We also
lease mobile aerial sites and fi bre
optics to telecoms operators.
Revenue in the Property business,
at £2.3m, was at the same level as
last year. The £1.4m profi t, excluding
the impact of investment property
revaluation, was £0.1m higher
than last year. Our investment
property portfolio moved up in
value by £6.1m to £27.8m, based on
professional analysis by our external
consultants who review the valuation
position annually. This increase
was pronounced due primarily
to a restructuring of the lease
arrangements for our largest tenant,
whereby the existing break clause was
moved to a later date which materially
moved the valuation upwards. The
value of residential properties also
rose by £1.1m due to continued
buoyant market conditions in Jersey.
Profi t (excluding the
impact of investment
property revaluation)
£1.4m
+£0.1m
Annual Report and Accounts 2021 47
JEBS
JEBS, our building services business,
has now transitioned from large
scale contracting operations to focus
on the delivery of the JE Vision. The
team is now focused on activities that
more closely support other business
teams in particular, Energy Solutions,
Customer Care and Metering
delivering our Vision to ‘enable life’s
essentials’ and inspire a zero-carbon
future.’
The result is that the new streamlined
more strategically focused JEBS
maintained its recent strong
performance with a set of results this
year. Although Revenue decreased
from £3.8m in 2020 to £3.4m it was
accompanied by a profi t of £0.2m in
line with 2020.
The team helped Energy Solutions to
deliver a record number of domestic
fuel switches (316) and take the
number of public charger installations
to 95 at year end, while its amenity
lighting team continued the supply,
installation, and maintenance of LED
lighting columns across the Island for
the public roads network. JEBS has
also this year taken over responsibility
for the facilities management of our
Queen’s Road site and residential
property portfolio of 29 dwellings.
The team also rose to challenges the
pandemic continued to present, JEBS
managing in many areas to continue
working with increased safety
measures in place to protect staff and
members of the public.
Outlook
Back in 1990, in an effort to tackle global warming,
international leaders set an objective to reduce global
carbon emissions. Thirty years later, the concentration of
carbon in the atmosphere continues to grow along with
average global temperatures, increasing the frequency of
extreme weather events and repeated environmental crises.
Whilst there is rising frustration and impatience, the scale of
international commitment to the decarbonisation agenda
has never been greater.
That momentum is now emerging in
Jersey. The Island declared a climate
emergency in 2019 and has had
its first Citizens’ Assembly seeking
Islanders input on the issue, followed
by an in-committee debate in which
the States Assembly considered the
Assembly’s findings. Civil servants
have been translating ideas into a
Carbon Neutral Roadmap and policy
recommendations for formal debate
by the Assembly in early 2022 – it is
hoped – before the June elections.
Whilst there is some uncertainty
around where Jersey will settle in
terms of ambition and associated
policy, it is widely viewed that an
ambition of net-zero by 2050 is the
minimum acceptable for a relatively
wealthy island like Jersey to be able
trade into UK, EU and international
economies.
Community engagement
Jersey has delivered a strong
performance on carbon reduction
over the last 30 years, reducing
emissions by more than 30%. This has
largely been delivered directly as a
result of JE’s importation strategy and
the decarbonisation of the electricity
grid. Now that the grid is virtually
completely decarbonised, the only
way the Island can reduce emissions
further is by stopping the burning of
fossil fuels, oil and gas. The challenge
has now shifted to one requiring full
commitment and engagement of the
whole community.
Unfortunately, weak policy support
has meant that the Island’s
decarbonisation progress has
slowed. We remain hopeful that the
Government will acknowledge this and
get back on track. We would like to see
an ambition more challenging than
net zero by 2050, reflecting our belief
that Jersey could deliver a zero-carbon
future faster and more cost effectively
than virtually anywhere else – greatly
helped by the spare capacity of a well
invested and decarbonised electricity
grid and the fact that Jersey has no
heavy industry and short travelling
distances. All the solutions for Jersey
are available – we need to find ways to
incentivise them and deliver them.
We believe that Jersey can rise
to the opportunity of becoming
a ‘zero-carbon smart Island’,
repositioning and differentiating
itself internationally as a progressive,
sustainable, technology showcase
that is willing to take responsibility in
all the sectors in which it participates.
Whatever the policy objective,
Government will need to make tough
decisions and take bold actions with
increasing urgency before Jersey
completely loses the advantage it
has gained.
‘A force for good’
While the policies the Island will take
present some risks for Jersey and
Jersey Electricity, with a particular risk
arising from the threat of regulation,
which evidence from elsewhere
suggests will lead to poorer services
and higher priced electricity for
Islanders, the Company remains well
positioned to be a ‘force for good’
in Jersey helping to ‘enable life’s
essentials and inspire a zero-carbon
future’.
There will for sure be challenges
and some risks ahead, but Jersey
Electricity promises to have an
important role in assisting the Island
in its efforts to decarbonise and,
we hope, become an international
showcase of what is possible.
48
JERSEY ELECTRICITY
Our business model, with a prudent,
long-term focus, has greatly helped
the business weather the storm of
COVID-19, the increased political
tensions from fishing - to which we
have responded by developing further
contingency measures - and the
recent energy market disruption in UK
and Europe. Our core services have
remained resilient across all three
trilemma dimensions of affordability,
security and sustainability.
The recent market failures in the UK
illustrate the downsides to regulation
and competition, leaving customers
exposed to riskier supply chains,
power shortages, price increases as
well as supplier bankruptcies.
Focus on the future
With the stability and protection
afforded by Jersey Electricity’s
business model and strategy, we have
been able to maintain our focus on the
future and the long term whilst local
competitors and international energy
businesses have been distracted by
nearer-term issues of the day.
We are accelerating investment in an
already well invested, largely future
proofed and efficiently operated grid.
We continue to explore offshore wind
which is potentially commercially
viable in the near-term, and we are
considering the role of tidal generated
electricity in Jersey’s energy mix in
the future. We are also scaling up our
investment in technology and digital
and have put in place important
foundational elements of this strategy.
Overall, we are making good progress
with our cultural transformation
programme, solution and
infrastructure development and,
whilst there is considerable work to
do, we remain well positioned to assist
Jersey and its residents in a manner
that is not only morally and ethically
the right thing to do, but also in the
interests of all stakeholders.
There will for sure be challenges
and some risks ahead, but Jersey
Electricity is poised to have an
important role in assisting the Island
in its efforts to decarbonise and,
we hope, become an international
showcase of what is possible.
Annual Report and Accounts 2021 49
50
JERSEY ELECTRICITY
Financial Review
Group Financial Results
Key Financial Information
2021
2020
Revenue
Profit before tax
Earnings per share
Dividend paid per share
Final proposed dividend per share
10.20p
Net cash
£13.1m
£118.6m
£111.7m
£19.1m
£14.8m
52.73p
16.90p
37.94p
16.05p
9.70p
£5.5m
Group revenue for the year to 30 September 2021 at £118.6m
was 6% higher than in the previous financial year. Energy
revenues at £89.8m were 5% higher than the £85.1m achieved
in 2020. Higher unit sales of electricity were linked to a
recovery from the COVID-19 crisis in the retail and hospitality
sectors, and an uplift from increased home working, combined
with colder than normal weather, and a 2.5% tariff rise from
October 2020. Revenue in the Powerhouse retail business
increased 11% from £17.8m in 2020 to £19.8m. Revenue in
the Property business at £2.3m was marginally higher than
last year. Revenue from JEBS, our building services business,
decreased from £3.8m in 2020 to £3.4m. Revenue in our other
businesses at £3.3m, was above the £2.7m delivered in 2020.
Cost of sales at £74.2m was £4.5m higher than last year with
the increased revenue level in our Energy and Powerhouse
Retail businesses.
Operating expenses at £30.0m were £3.6m higher than last
year. Of this increase, £1.8m related to the non-cash ex-gratia
award for pensions in service, in our defined benefits pension
scheme, discussed later in this narrative. The remainder of the
rise is largely due to the increased investment in systems
and people, associated with the de-carbonisation vision for
the Island.
Profit before tax for the year to 30 September 2021 was
£19.1m against £14.8m in 2020. However, if the non-cash
upside from revaluation of investment properties is excluded
in both years, along with the non-cash cost of £1.8m for the
ex-gratia award for pensions in service in 2021, the underlying
year-on-year profit before tax is £14.8m in 2021 against
£14.3m in 2020, an increase of 3%.
Profit in our Energy business, at £10.7m, was below the
£12.3m achieved in 2020, largely due to the non-cash £1.8m
ex-gratia award for pensions in service in 2021. Our target
return on assets employed continues to be in the 6%-7% range
over the medium-term and was 5.9% in 2021 against 6.8% in
2020. Unit sales volumes increased by 3% from 619m to 639m
kilowatt hours, due to colder than normal weather, combined
with a material proportion of customers continuing to work
from home, due to COVID-19. Units billed in the 2021 financial
year increased by around 8% in the residential sector, but fell
around 2% for commercial premises, compared with 2020. In
the financial year we imported 95.2% of our requirements from
France (2020: 94.7%) and generated 0.4% of our electricity
on-Island from our solar and diesel plant (2020: 0.2%). The
remaining 4.4% (2020: 5.1%) of our electricity was purchased
from the local Energy from Waste plant. The planned 2.5%
tariff rise from 1 April 2020, which was postponed, to aid our
customers due to the COVID-19 pandemic, took place on
1 October 2020.
The £1.4m profit in our Property division, excluding the impact
of investment property revaluation, was £0.1m higher than
last year. Our investment property portfolio moved up in
value by £6.1m to £27.8m, based on advice from our external
consultants, who review the position annually. This increase
was pronounced due primarily to a restructuring of the lease
arrangement for our largest tenant, whereby the existing
break clause was moved to a later date, post commercial
discussions, which materially moved the valuation upwards.
The value of residential properties contributed £1.2m of the
total rise due to continued buoyant market conditions in Jersey.
Our Powerhouse retail business saw profits rise by 30% from
£1.2m to £1.5m during a period when COVID-19 continued
to influence the behaviours, and spending patterns of local
customers, for example, due to less travel taking place out of
the Island over the last year.
JEBS, our building services unit, maintained profitability at
£0.2m, being at the same level as 2020.
Our other business units (Jersey Energy, Jendev, Jersey Deep
Freeze and fibre optic lease rentals) produced profits of £0.6m
being £0.2m lower than last year mainly due to accelerated
depreciation in Jendev.
The net interest cost in 2021 was £1.4m being at the same
level as in 2020. The taxation charge at £2.8m was lower
than the previous year, despite increased profit, as the profit
increase was largely non-taxable, being due to non-cash items.
Group basic and diluted earnings per share, at 52.73p,
compared to 37.94p in 2020 due to increased profitability.
Dividends paid in the year, net of tax, rose by 5%, from 16.05p
in 2020 to 16.90p in 2021. The proposed final dividend for this
year is 10.20p, a 5% rise on the previous year. Dividend cover,
at 3.1 times, was higher than the comparable 2.4 times in 2020
due mainly to the large non-cash increase in the revaluation of
investment properties in 2021.
Ordinary Dividends
2021
2020
Dividend paid - final for previous year
9.70p
9.25p
- interim for current year
7.20p
6.80p
Dividend proposed - final for current year
10.20p
9.70p
Net cash flows from operating activities at £22.4m was
£4.5m lower than in 2020. Investing activities, at £9.3m
was £1.8m lower than £11.1m last year. Dividends paid were
£5.3m compared to £5.0m in 2020. The resultant position was
that net cash at the year-end was £13.1m, being £30.0m of
borrowings offset by £43.1m of cash and cash equivalents,
which was £7.6m more than last year.
Annual Report and Accounts 2021 51
Financial Review
Cash Flows
Summary cash flow data
2021
2020
Net cash inflow from
operating activities
Capital expenditure
and financial investment
£22.4m
£26.9m
£(9.3)m
£(11.2)m
Deposit interest received
£0.1m
£0.1m
Repayment of lease liabilities
£(0.3)m
£(0.2)m
Dividends
£(5.3)m
£(5.0)m
Increase in cash
£7.6m
£10.6m
Prior year adjustment
During 2020 we migrated to a new Smart Pay As You Go
metering solution for around 4,000 of our electricity customers
who choose this payment method as a budgeting tool. The
legacy system, which had been installed in the 1990’s, was
scrapped and the remaining credit balances and debts that
existed on each meter transferred across to the new system.
Following a review of the remaining £0.9m balance in our
receivable’s ledger we ascertained that there had been a
systematic over statement of income from this payment
method over the period since 1998, when a new ERP financial
system was adopted. Although the sums were relatively
immaterial on an annual basis, the full scale of the issue only
became apparent when the new smart metering system was
installed. It is not possible to accurately allocate adjustments
to all the individual years between 1998-2019. This £0.9m
has been written off and treated as a prior year adjustment
against reserves and comfort provided, that this is not a
recurring issue with the new system.
Treasury matters and hedging
policies
Operating within policies approved by the Board and overseen
by the Finance Director, the treasury function manages
liquidity, funding, investment and risk from volatility in foreign
exchange and counterparty credit risk.
As a substantial proportion of the cost base relates to the
importation of power from Europe, which is contractually
denominated in Euro, the Company enters into forward
currency contracts to reduce exposure and as a tool to aid
tariff planning. The average Euro/Sterling rate underpinning
our electricity purchases during the financial year, as a result of
the hedging programme, was 1.12 €/£. The average applicable
spot rate during this financial year was 1.15€/£ against 1.14€/£
during the 2020 financial year.
Interest rate exposure is an area of potential risk but is
managed by the £30m of private placement monies received
in July 2014 having a fixed coupon and represents all of our
borrowings at present.
The Group may be exposed to credit-related loss in the event
of non-performance by counterparties in respect of cash
52
and cash equivalents and derivative financial instruments.
However, such potential non-performance is monitored
despite the high credit ratings (investment grade and above)
of the established financial institutions with which we transact.
We also employ a policy of diversification through use of a
number of counterparties.
In the 2021 financial year Jersey Electricity imported 95% of
the electricity requirements of Jersey from Europe. It jointly
purchased power with Guernsey Electricity from EDF in France.
The supply contract allows power prices to be fixed in Euros
in advance of decisions being made on customer tariffs. We
have been importing electricity from Europe since 1984 and
our latest ten year power purchase agreement with EDF,
which commenced in 2013, was extended by a further five
years during 2017 to the end of 2027. This combines a fixed
price component with the ability to price fix future purchases
over a rolling three year period based on a market related
mechanism linked to the EEX European Futures Exchange. The
goal is to provide our customers with a market-based price but
with a degree of certainty in a volatile energy marketplace. A
Risk Management Committee exists, consisting of employees
of Jersey Electricity, Guernsey Electricity and an independent
energy market adviser and follows guidelines approved by the
Jersey Electricity Board.
We have seen unprecedented volatility in energy markets
during 2021, which has resulted in many UK suppliers going
out of business, and the Ofgem regulated cap on UK electricity
prices rising by around 20% since April 2021. These are
expected to materially rise again, when formally reviewed in
early 2022. Energy prices, including gas, have risen by an even
higher quantum. We are not immune to these conditions, but
our hedging policies have largely sheltered Jersey customers
from the material rises being experienced elsewhere with the
period 2022-2024 being largely hedged for the price we will
pay for electricity, and, to a lesser extent, the foreign exchange
requirements we need to settle such liabilities. We announced
in October 2021 that a 4% tariff rise would be instigated from
1 January 2022, and although this is unfortunate, it is much
lower than increases being seen elsewhere. Even after this rise,
we will continue to benchmark very favourably against other
jurisdictions.
Defined benefit pension scheme
arrangements
As at 30 September 2021 the scheme surplus, under IAS 19
“Employee Benefits”, was £15.0m, net of deferred tax, compared
with a surplus of £5.9m at 30 September 2020. Assets rose
3% from £156.6m to £161.1m in the same period. Liabilities
decreased 5% from £149.3m to £142.3m since the last year-end
with the discount rate assumption, which heavily influences the
calculation of liabilities, rising from 1.6% in 2020 to 2.1% in 2021
to reflect sentiments in prevailing financial markets.
Our defined benefits pension scheme is an area of risk that
continues to require careful monitoring as it is driven largely
by movements in financial markets and materially impacted
by relatively small movements in the underlying actuarial
assumptions. If the discount rate applied to the liabilities
had been 0.5% lower than the 2.1% assumed under IAS 19
for 2021, the net surplus of £15.0m would have moved to
a lower surplus of £4.4m. Alternatively, if the discount rate
JERSEY ELECTRICITY had been 0.5% higher the net surplus would have increased
to £24.2m. In a bid to mitigate the impact of movements
in interest rates and inflation the trustees of the scheme
have adopted a Liability Driven Investment (LDI) approach
which seeks to reduce the risk that asset and liability values
change at different rates, or move in different directions. The
proportion of scheme assets in LDI/UK Gilts products moved
proportionately from 37% at the last year end, to 34% at 30
September 2021 (but were increased, post the balance sheet
date, in October 2021, to 37%).
The most recent triennial actuarial valuation, as at 31
December 2018 showed a surplus of £3.7m but this has grown
substantially and as at the end of October 2021 had grown to
around £18m. Unlike most UK schemes, the Jersey Electricity
Pension Scheme is not funded to pay mandatory annual
rises on retirement. The Pension Scheme Trustees asked the
Company to consider the granting of a 3% rise to pensions in
service in light of the level of the surplus as the last increase
was in 2019. This was agreed by the Board and the capital
cost of this award was £1.8m and the cash will be paid by the
Scheme, rather than the Company, but generated a £1.8m
charge against our Income Statement in the current financial
year. This is reflected in the year-end surplus figure of £15.0m.
The final salary scheme was closed to new members in 2013,
with new employees, since that time, being offered defined
contribution pension arrangements. The next triennial
actuarial valuation of the defined benefit scheme will have an
effective date of 31 December 2021.
Returns to shareholders
62% of the ordinary share capital of the Company is owned
by the Government of Jersey with the remaining 38% held
by around 600 shareholders via a full listing on the London
Stock Exchange. Of the holders of listed shares, Huntress (CI)
Nominees Limited owns 5.3m (46%) of our ‘A’ Ordinary shares
representing 17% of our overall Ordinary shares and around
5% of voting rights. This nominee company is held within
the broker firm Ravenscroft which has placed our stock with
a number of private clients, and a fund, residing largely in
the Channel Islands. During the year the ordinary dividend
paid increased by 5% from 16.05p net of tax to 16.90p. The
proposed final dividend for 2021, at 10.20p, is a 5% increase on
last year and consistent with the underlying dividend pattern
in recent years and with our stated policy to aim to deliver
sustained real growth in the medium-term. The chart below
shows the evolution of the ordinary dividend payments over
the last 15 years (excluding additional special dividends) that
have risen from 5.30p to 16.90p.
18
16
14
12
10
8
6
4
2
0
e
r
a
h
s
r
e
p
e
c
n
e
p
Dividend paid per ordinary share - 2006 to 2021
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
The share price at 30 September 2021 was £5.93 against £4.82
at the 2020 year end. This gives a market capitalisation of £182m
at 30 September 2021 compared with a balance sheet net
assets position of around £225m. However, the illiquidity of our
shares, due mainly to having one large majority shareholder,
combined with an overall small number in circulation, constrains
the ability of the management team to influence the share price.
We use Edison (an investment research firm) to produce regular
research on our performance to aid the understanding of our
value proposition to a wider body of potential investors in the
quest to improve our longer-term liquidity. The following chart
shows the trending of our listed share price over the last 15
years that has risen from £2.31 to £5.93.
‘A’ Ordinary share price movements 2006 - 2021
6.5
6.0
5.5
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
e
r
a
h
s
r
e
p
£
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Our largest shareholder, the Government of Jersey, also owns
holdings in other utilities in Jersey. It holds 100% of JT Group,
Ports of Jersey, Andium Homes and Jersey Post, as well as
around 75% of Jersey Water. The total direct cash return to the
Government of Jersey from Jersey Electricity in the last year
was £12.1m (2020: 11.4m). The increase was primarily due to a
higher level of GST collected on behalf of the Government
of Jersey.
Ordinary dividend
2021
2020
£3.2m
£3.1m
Goods and Services Tax (GST)
£5.2m
£4.7m
Corporation tax
£2.7m
£2.7m
Social Security - employers contribution
£1.0m
£0.9m
£12.1m
£11.4m
The Company regularly communicates with its largest
shareholders and details of discussions, including any
concerns are reported to the Board. The Chairman meets twice
a year with the Treasury function within the Government of
Jersey, ensuring there is a direct communication between the
non-Executives and our largest shareholder.
Viability Statement
In accordance with provision 31 of the 2018 revision of
the Code, the Directors have assessed the prospect of the
Company over a longer period than the minimum 12 months
required by the ‘Going Concern’ provision. As disclosed last
year, the Board conducted this review for a period of five years,
selected because annually a refreshment of the Five-Year Plan
is performed with the latest version presented to the Board in
Annual Report and Accounts 2021 53
Financial Review
September 2021. This included an assessment of how potential
fishing dispute issues, post Brexit, might be dealt with in the
unlikely circumstances where electricity imports from France
were constrained by political action.
This document considers our forecast investment, hedging
policy for electricity procurement and linked foreign exchange
requirements, debt levels and other anticipated costs, and the
resultant impact on likely customer tariff evolution. In addition,
material sensitivities to this base case are considered. We
have a strong balance sheet with net assets of around £225m
supported by £30m of long-term debt funding which expires in
2034 and 2039.
Stress testing of the cost base of our Energy business was
performed to establish the impact of material movements
in both foreign exchange and wholesale electricity prices. A
reduction in the volume of unit sales of electricity through,
for example, energy efficiency is being mitigated by switching
existing customers, who use gas/oil as their primary heating
source, to all-electric solutions. A dedicated team work
on initiatives in this area. However, as we employ a ‘user
pays’ model the Board has comfort on the longer term
consequences of a reduction in the volume of electricity
sales, a permanent weakening in Sterling, or a material rise in
European wholesale power prices (albeit we continue to strive
to deliver price stability for our customer base).
Based on the results of this analysis, and on the basis that
the fundamental regulatory and statutory framework of the
market in which the Company operates does not substantially
change, the Directors have a reasonable expectation that
the Company will be able to continue to operate, and meet
its liabilities as they fall due, over the five-year period of their
assessment through to 2026.
In making this statement the Directors have considered the
resilience of the Company taking into account its current
position, its principal risks and the control measures in place
to mitigate each of them. In particular, the Directors recognise
the significance of the strong Jersey Electricity plc balance
sheet, and committed lending facilities, that will be available in
most circumstances.
54
JERSEY ELECTRICITY Group Risk Management
Understanding and managing our risks is front of mind in everything we do. Our risk management framework helps us meet
our strategic and operational objectives and is designed to manage both risk and opportunities. Overall, the framework enables
our people to make informed business decisions in the best interest of our customers, the Group and our shareholders whilst
encouraging us to embrace the concept of taking measured risks, which drive innovation and growth.
1) Governance - Board responsibility
The Board retains overall accountability and responsibility for the Group’s risk management and internal control systems. The
Board fulfils their role by:
• defining the risk appetite – the Board periodically reviews the nature and amount of risk the Group is willing to accept when
doing business and achieving strategic objectives
• conducting robust risk assessments – the Board undertakes assessments of the principal and emerging risks to understand
the potential that these risks may impact the ability to achieve strategic objectives
• reviewing mitigation plans – the Board will review the principal risk assessments and agree how these risks should be
managed or mitigated to reduce the likelihood of their incidence or the magnitude of their impact
• identifying emerging risks – the Board reviews the procedures in place to identify emerging risks and challenge how these
risks are being managed or mitigated
• approving the principal risks and uncertainties disclosure - at year end, the Board reviews the descriptions of principal
risk and uncertainties, explanations of how these risks are being managed or mitigated, and other relevant information
describing the Group’s risk management and internal control systems.
The Board recognises that the system of risk management is designed to manage, rather than eliminate, the Group’s exposure to
business risks, and can only provide reasonable assurance and not absolute assurance against material misstatement or loss.
2) Governance – Audit and Risk Committee responsibility
The Board has delegated the Audit and Risk Committee (‘ARC’) with the responsibility of assessing the effectiveness of risk
management framework. The ARC fulfils their role by:
• establishing procedures to manage risk and oversee the internal control framework
• reviewing and challenging the principal risks, emerging risks and the aggregate risk assessments from the ‘bottom-up’ risk
register
• approving the annual internal audit plan and reviewing internal audit reports on the effectiveness of internal controls, as a
result of independent assurance work undertaken throughout the year
• undertaking risk deep dives to review high priority risks, ad-hoc topics and emerging matters
• monitoring management’s implementation of audit recommendations and actions arising from risk assessments
3) Risk Management Framework
Principal Risk Register
The principal risk register is a summary of the top risks, emerging risks and uncertainties facing the Group Executive Leadership Team (‘ELT’).
It is collated into a group view after a process of bottom up and top-down risk assessments, with the risks assigned a member
of the Executive leadership team.
Risk Landscape
Risk management framework
Monitoring and oversight
Principal and Group risks
– These risks are known
to the business and must
be managed to ensure we
achieve operational and
strategic objectives.
Emerging risks – These risks
are emerging threats that
may potentially impact us
in the future. Due to their
nature, we are unable to
understand the likely scale,
impact or velocity of the risk.
We monitor these threats
until better understood.
• Risk ownership – each risk will have a named owner
• Risk causes – a list of reasons why the risk could occur
• Likelihood and impact – the possibility and estimated
harm caused by the risk
• Inherent risk – assessment of the risk before
mitigating controls
• Mitigating controls – implemented by management
to reduce/eliminate the risk
• Residual risk – assessment of the risk after mitigating
controls are applied
• Risk Appetite – set by the Board, this is the level of
risk the Group is prepared to accept
• Action plans – Workstreams, projects and tasks in
place to strengthen controls
Board – determines the Group’s
approach to risk and procedures put in
place to mitigate exposure to risk
Audit and Risk Committee – has
delegated responsibility from the
Board to assess the effectiveness of
risk management and internal controls
ELT risk owners – responsible
for managing the risk registers,
monitoring internal controls and
implementing the actions plans
Internal audit – independently reviews
the effectiveness of internal controls
and provides assurance to the Audit
and Risk Committee
Bottom-up registers
Each business unit is responsible for identifying risks arising from day-to-day operations.
Management must design and implement adequate control measures and undertake regular risk assessments.
Annual Report and Accounts 2021 55
Group Risk Management
Our risk management programme clearly defines roles and responsibilities and sets out a consistent end-to-end process for
identifying and managing risks. The core risk assessments are undertaken by each business unit, with the risk owners responsible
for identifying and assessing risks which could affect day to day business unit operations.
The bottom-up risks are consolidated into a Group risk register, along with emerging risks and opportunities, which are presented
to the Executive Leadership Team for their review. Applying a Group-wide perspective, the Executive Leadership Team evaluates
and determines our top principal and emerging risks. The proposed principal risks, Group risk register and emerging risks are
submitted to the ARC and the Board for the final challenge and approval.
During the risk evaluation phase, we assess the risk impact and define the source or potential causes of the threat. The assigned
executive risk owners are accountable for confirming adequate controls are in place and that the necessary treatment plans are
implemented to bring the risk within the risk appetite.
Our risk management framework is continually evolving, to enable a holistic approach to managing risks and achieve business
resilience. Key improvements which are in progress include:
• enhancing the approach to identifying and assessing the impact of emerging risks
• understanding the interdependencies of our principal risks and analysing the potential impact of any correlation between
these risks
• improving the way we collect and treat early signals in the internal and external environment by establishing and monitoring
key risk indicators
4) Risk management in a challenging environment
The challenges and pressures of the ongoing global COVID-19 pandemic have placed greater emphasis on our risk management
programme. We have enhanced our monitoring and assessment of our principal and emerging risks throughout the pandemic,
which enabled the effective management of any challenges and opportunities. We do not consider the COVID-19 pandemic as an
individual risk, but rather continue to monitor the impact of the pandemic on our principal and emerging risks.
5) Risk Appetite
The Board has determined the risk appetite for the Group’s principal risks. We categorise our risks into four different areas to
provide the appropriate level of governance and oversight to effectively manage these risks, as summarised below:
• Strategic - We have a moderate risk appetite for strategic risks to encourage innovation and the development of new product
propositions / service offerings, whilst minimising financial losses and ensuring a measured approach to risk and returns is
applied during decision making
• Financial - We have adopted a cautious to moderate risk appetite for financial risks, following a conservative hedging strategy
to maintain competitive pricing and smooth any increases to costs over time
• Operational - Operational risks impacting customer experience have been set as cautious, to reflect our responsibility as
the sole supplier of electricity in Jersey and continually challenging ourselves to deliver value. In contrast, we have a low risk
appetite for risks to health and safety and continue to strive for an incident free workplace
• Technical - We also have a very low risk appetite for managing cyber threats and failing to conduct business operations in
compliance with data protection laws.
6) Our principal risks and uncertainties
The following tables set out the Group’s principal risks, and provides a description of the risk, risk owner, risk trend, risk appetite
and mitigating actions. The principal risks are considered by the Board to be the most significant risks that could materially affect
the Group’s financial condition, ongoing performance and future strategy. The risks listed do not comprise all risks faced by the
Group and are not set out in any order of priority. Additional risks not presently known to management, or currently deemed to be
less material, may also have an adverse effect on the business.
56
JERSEY ELECTRICITY Risk profile change
Key
<
Increasing < Decreasing
Risk Category: Strategic Risks
<> Stable
Energy market share growth
Strategy and disruptive technology
Description: Inability to grow anticipated unit
sales and other revenue streams, resulting in
long term loss of market share and depleting
profit margins.
Description: Failure to innovate and maximise
the growth potential of the business, could
negatively impact our ability to compete in the
market and grow unit sales of electricity.
Risk Owner: Director of Commercial Services
Movement: <> Stable
Risk Appetite: Cautious
Risk Owner: Operations Director
Movement: <> Stable
Risk Appetite: Moderate
Key mitigating actions
• The prime defence against falling volumes
is to migrate existing customers who use
gas/oil as their primary heating source to
all-electric solutions.
Key mitigating actions
• Opportunities and challenges related to
growth are a major area of focus throughout
the business, with advances in technology
reviewed and discussed.
• Numerous workstreams in place to develop
• Refreshed vision includes key strategic
new electricity/ service propositions,
including financing, enabling growth beyond
2021.
• A dedicated team works on initiatives in
these areas - including EV, solar power and
other renewable options.
workstreams which address innovation and
growth opportunities.
• Macro-economic factors that could
potentially impact the strategy are tracked
and regularly reviewed by ELT.
• Growth opportunities are reviewed in the
light of our risk appetite, values, business
model and culture.
Risk Category: Financial Risks
Adverse political and regulatory measures
Market volatility and tariff prices
Pension Liabilities
Description: The introduction of adverse
political and regulatory measures could result
in the attendant cost of compliance and
negatively impact public relations.
Description: Adverse movements in market
conditions will negatively impact tariffs, causing
reputational damage and making it difficult to
compete against other fuel providers.
Principal risk trend: < Increasing
Principal risk trend: < Increasing
Risk Owner: Finance Director
Risk Appetite: Cautious
Risk Owner: Finance Director
Risk Appetite: Moderate
Description: Volatility of markets impacting
our Defined Benefit Pension Scheme position
e.g. liabilities increase due to market conditions
or demographic changes and/or investments
underperform.
Principal risk trend: <> Stable
Risk Owner: Finance Director
Risk Appetite: Moderate
Key mitigating actions
• Strategic objectives in place to ensure we
balance between being the key service
provider on the Island whilst recognising
our responsibilities to a wide number of
stakeholders.
• Transparent and regular communication
with key stakeholders and policy makers.
• Benchmarking ourselves against
comparable Key Performance Indicators
with other jurisdictions (e.g., Tariffs,
Customer Minutes Lost, CO2 emissions, Lost
Time Accidents).
• Continuous monitoring of political
and legislative developments (e.g., the
Government’s Energy Plan).
Key mitigating actions
• Power Purchase contract with EDF in place
Key mitigating actions
• The Board regularly monitors the latest
to 31 December 2027.
• Both the Hedging and Treasury policy are
reviewed annually and approved by the
Board.
• Financial risks and hedging positions are
reviewed regularly, with comprehensive
status updates on the hedging programme
provided at each Board meeting.
• Daily monitoring of pricing against future
tariff prices is undertaken by the Treasury
Team, with significant movements reported
to management, the Audit and Risk
Committee and Board.
position regarding the Scheme and the impact
it is having on the Company.
• The Trustees implemented an LDI strategy
to reduce the exposure to movements in the
value of pension liabilities.
• The Defined Benefit scheme was closed to new
members in 2013.
• A triennial valuation formally reports on
performance.
Annual Report and Accounts 2021 57
Group Risk Management
Risk Category: Operational Risks
Reliable and secure supply of energy
Climate change and protecting the
environment
Health and safety
Description: Unable to maintain operations
and continuity of electricity supply, leading
to frequent disruption to supply, including an
island wide power outage.
Description: Failure to take appropriate measures
to protect our environment and respond to climate
change, could result in regulatory, financial and
reputation repercussions.
Description: Failure to ensure safe ways of
working across the Group could result in a health
and safety incident, leading to serious injury,
illness or loss of life.
Risk Owner: Operations Director
Movement: <> Stable
Risk Appetite: Cautious
Risk Owner: Operations Director
Movement: < Increasing
Risk Appetite: Cautious
Risk Owner: Operations Director
Movement: <> Stable
Risk Appetite: Averse
Key mitigating actions
• Robust processes and procedures in
Key mitigating actions
• Participation and involvement in the
place to prevent unplanned outages and
interruptions to services.
development and implementation of the
Government’s Energy Plan.
• Three subsea cables to France provide
• Committed to government environmental
resiliency with regards supply importation
cables.
objectives by providing renewable energy and
charging outlets for EVs.
Key mitigating actions
• A proactive safety culture has been
nurtured throughout the organisation
which is supported by a safety management
structure, Safety Representatives,
programmes of site inspections and regular
training.
• Contingent additional supply provisions put
• Integrating the climate concerns into
• Performance measures are explicitly
processes, resulting in reviews / rethinks of
our supply chain, purchases and the way we
conduct our business activities.
presented as a separate agenda item at
each Board meeting.
• A Health, Safety and Environment team
• Environmental framework, policies and
procedures are in place across the Group, with
compliance monitored by the Health, Safety
and Environment team.
sets standards and monitors performance
against those standards.
• Accident, incidents and near misses are
reported and recorded, with analysis
performed on trends and root causes.
in place this year.
• Strong relationship with our suppliers and
engage in ongoing dialogue to understand
any developments that might impact
security of supply.
• On-Island generation capability to limit
over-reliance on any single fuel source or
technology.
• Repair and maintenance programme in
place to optimise the life of all assets.
• Comprehensive business continuity plans
which are periodically tested under various
scenario exercises.
• The completion of Smart Switch project has
enhanced metering data, enabling improved
analytic insights to better manage load and
provide smarter metering solution to our
customers.
Risk Category: Operational Risks
Risk Category: Technological Risks
People and culture
Data loss or regulatory breach
Cyber threat and information security
Description: Inability to retain and develop
the right people and skills required to achieve
business objectives in a culture and environment
where employees can thrive.
Description: Data loss, release or misuse
of personal and confidential information
resulting in a regulatory breach, highly
publicised investigations, fines / penalties and
reputational damage.
Description: A cyber-attack or internal malicious
activity could cause serious disruption to critical
systems, causing major impact to operations
and lead to customer, financial and reputational
impacts.
Risk Owner: Human Resources Director
Movement: <> Stable
Risk Appetite: Moderate
Risk Owner: Director of Technology
Movement: <> Stable
Risk Appetite: Averse
Risk Owner: Director of Technology
Movement: < Increasing
Risk Appetite: Averse
Key mitigating actions
• Long-range workforce planning to better
forecast leavers and skill shortage risk.
• Annual succession planning for leadership
and critical roles, including replacement
chart, indicating risk areas.
• Diversity strategy to continually build
diversity across all roles and levels within
our business.
• School engagement and apprenticeship
programs in place to encourage the younger
generation to pursue STEM careers.
• Continuous focus on our values and culture,
which are aligned with our purpose.
• Increased emphasis on mental health,
wellness programs and improving ways of
working.
Key mitigating actions
• Appointment of a new data protection
officer (DPO).
• Internal privacy governance structure
established.
• Well documented processes and policies
to enable compliance with laws and
regulations.
• Enhanced data protection impact
assessments (DPIA) and continuous
monitoring of risk assessments.
Key mitigating actions
• Use of antivirus and malware software,
firewalls, email scanning and internet
monitoring to identify and prevent cyber
threats.
• Information security systems that identifies,
mitigates and removes malicious domains
and Internet Protocols
• IT policies in place to manage administrator,
privileged and service accounts.
• Regular monitoring of unusual or suspect
• On-going data protection training as we
activity on the corporate network.
recognise that data protection breaches are
not always technical, and that awareness is
our first point of control.
• Ongoing compliance program, including
reviews of data library and monitoring of
retention and destruction schedules.
• Testing of cyber security including system
penetration testing and internal phishing
training exercises.
• On-going cyber awareness training across
the Company.
• Core applications are only accessible
through a secure portal that require multi
factor authentications.
58
JERSEY ELECTRICITY 7) Emerging risks
As with all businesses, we face a number of uncertainties which may potentially impact us in the longer term. Where there is
insufficient information available to understand the likely scale, impact or velocity of the risk, we have classified these threats as
emerging risks.
We identify new emerging risks, through the evaluation of our business strategy, new technologies, products and services as well
as government policies, regulation and cyber threats. Once identified, we evaluate the impact and potential effect it could have on
the group and principal risks. The table below highlights the latest emerging risk that we have on our radar, that may, in time, pose
a threat to the Group’s business model and strategic objectives.
Emerging risk
Owner
Risk Description
Action plans
Brexit consequences
Finance
Director
Unknown or unforeseen consequences of Brexit
impacting our objectives, for example; during
May 2021, a fishing licence dispute arose between
the UK and EU, resulting in some concerns
around electricity supplies from France.
Climate Change
Operations
Director
Disruptive technology
in the energy sector
Operations
Director
Probability of extreme weather (such as storms
and heatwaves) impacting on our business
model and capacity for growth in demand. Also
public pressure for governments to respond to
climate change may result in the introduction
of obligations (new or strengthened carbon
neutrality commitments).
Advances in technology within the renewable
energy sector, bring both unknown opportunities
and threats in the long term. Failure to adapt
and exploit opportunities will impact our ability
to remain competitive and meet changes in
customer demands.
We maintain constant dialogue with Government
of Jersey, key suppliers and others to ensure we
are well informed of any developments.
We continue to keep a watchful brief over the
post Brexit matters and conduct robust risk
assessments once any impact becomes known or
better understood.
We are developing our net-zero commitments
and continue to monitor political and legislative
developments and assess the opportunities and
threats to enable us to respond effectively.
We are assessing the energy needs of the Island
over the longer term and how these might be
met, the impact on our business and timing of
change.
We continue to monitor developments in the
energy technology markets. This includes
attending Innovation and Future sessions and
attending focus groups in Jersey.
Annual Report and Accounts 2021 59
Governance
Board of Directors
Phil Austin MBE
Chris Ambler
Tenure on Board
Appointed 12 May 2016 and
Chairman from 28 February 2019
Appointed as CEO 1 October 2008
Committee Memberships
Nominations Committee
Nominations Committee
Remuneration Committee
Experience
Financial services background and
board level experience across a wide
range of listed and private companies
Chartered Engineer in various
leadership and general management
roles in blue chip multinationals
Strategy consultancy experience MBA
(INSEAD)
Broad experience across global utility,
chemicals and industrial sectors
Relevant Skills
Extensive experience in leadership
and management
Deep understanding of governance
standards and requirements
Good communication skills
Leadership and management
Strategy development
M&A and corporate finance
External Appointments
Chairman of Octopus Renewables
Infrastructure Trust plc
Non-Executive Director of Apax
Global Alpha Ltd
Non-Executive Director of Blackstone/
GSO Debt Funds (Europe) Ltd
Non-Executive Director of Foresight
Solar Fund Ltd
Non-Executive Director of Ravenscroft
Cash Management Ltd
60
JERSEY ELECTRICITY Martin Magee
Alan Bryce
Appointed as Finance Director 8 April
2002
Appointed 17 December 2015
Chartered Accountant
Broad experience across a number
of senior finance roles in UK listed
plcs, including utilities
Nominations Committee (Chairman)
Audit and Risk Committee
Extensive board level experience
in electricity generation, and
transmission and distribution in the
UK and USA
Non-executive experience in water
industry and wind farm development
Wide range of roles in corporate
strategy, M&A and utility regulation
Strong financial analysis and planning
skills
Commercial bias
Business leadership and governance
Chartered engineer with extensive
knowledge of the utility industry
Strong background in transactional
activity
Asset and operational risk
management
Non-Executive Director of Jersey Post
International Ltd
Non-Executive Director of Northern
Ireland Electricity Networks Ltd
Non-Executive Director of
Northumbrian Water Ltd
Annual Report and Accounts 2021 61
Board of Directors
Wendy Dorman
Tony Taylor
Tenure on Board
Appointed 14 July 2016
Appointed 21 September 2017
Committee Memberships
Audit and Risk Committee (Chairman)
Remuneration Committee (Chairman)
Nominations Committee
Nominations Committee
Experience
Chartered Accountant with audit
and tax experience
Senior management roles in leading
global advertising agencies
Leadership positions including Head
of Tax for PwC Channel Islands and
company Non-Executive Director
roles with audit chair experience for
listed companies
Relevant Skills
Leadership and management
Strategic planning and growth
Infrastructure investment
Customer experience
Accountancy, audit and taxation
Stakeholder engagement
Marketing and communications
External Appointments
Non-Executive Director of 3i
Infrastructure plc
Non-Executive Director of Jersey Milk
Marketing Board
Non-Executive Director of New City
High Yield Fund Limited
Non-Executive Director of Jersey
Sport
Non-Executive Director of Channel
Radio Ltd
62
JERSEY ELECTRICITY
Amanda Iceton
Appointed 1 June 2020
Audit and Risk Committee
Remuneration Committee
Executive leadership experience as
Chair and Managing Director of global
management consultancy Accenture
UK/Ireland plc
Extensive experience of chairing
Audit and Risk committees across UK
Government and listed companies
Digital and cyber skills developed
through work with CPNI and NCSC
Familiarity with UK and US GAAP
accounting
Preparation/approval of UK
government and company accounts
internationally, including USA and
South Africa
Non-Executive Director of Paragon ID
Non-Executive Director of Standard
Bank Offshore Group Ltd
Annual Report and Accounts 2021 63
Governance
Directors’ Report
for the year ended 30 September 2021
The Directors present their annual report and the audited fi nancial statements of Jersey Electricity plc (“the Company”) and Jersey
Deep Freeze Limited (together “the Group”) for the year ended 30 September 2021.
Principal activities
The Company is the sole supplier of electricity in Jersey. It is involved in the generation and distribution of electricity and jointly
operates the Channel Islands Electricity Grid System with Guernsey Electricity Limited importing power for both islands. It also
engages in retailing, property management, building services and has other business interests, including software development
and consulting.
Section 172(1) statement
We are required under the code to report on this area and it is central to our strategy to consider wider stakeholders. This is
despite Section 172 of the Companies Act 2006 not being applicable to us as a Jersey incorporated company. Nevertheless, as a
matter of good governance, the Board has set out how they deliver against these duties where appropriate. The Board of Jersey
Electricity plc considers that they have acted in good faith and in a manner which they believe is likely to promote the continued
success of the Company, for the benefi t of all its stakeholders as a whole. In addition to its shareholders, the Board engages with
Government, local Parishes, suppliers, customers, employees and pensioners. Our Vision is to ‘enable life’s essentials and inspire
a zero-carbon future’ which is aligned to a key goal of the Island to achieve carbon neutrality. In addition to pursuing organic and
inorganic growth, strategic focus is on building a sustainable business, product development, customer service, investing in the
development of new technology and in our workforce. The Board aims to ensure that our employees work in a safe environment,
receive appropriate training and are suffi ciently rewarded for their eff orts.
Dividends
The Directors have declared and paid, and now recommend the following dividends in respect of the year ended 30 September
2021:
Preference dividends
5% Cumulative Participating Preference Shares at 6.5%
3.5% Cumulative Non-Participating Preference Shares at 3.5%
Ordinary dividends
Ordinary and ‘A’ Ordinary Shares
Interim paid at 7.20p net of tax for the year ended 30 September 2021 (2020: 6.80p net of tax)
Final proposed at 10.20p net of tax for the year ended 30 September 2021 (2020: 9.70p net of tax)
2021
£
5,200
3,773
8,973
2020
£
5,200
3,773
8,973
2,206,080
3,124,280
2,083,520
2,972,080
5,330,360
5,055,600
Re-election of directors
Since 2018 all Directors seek re-election annually at each AGM.
Directors’ and offi cers’ insurance
During the year the Company maintained liability insurance for its Directors and Offi cers.
Policy on payment of creditors
It is Group policy, in respect of all of its suppliers, to settle the terms of payment when agreeing each transaction, to ensure that
suppliers are made aware of the terms of payment and to abide by those terms. The number of creditor days in relation to trade
creditors outstanding at the year-end was 8 days (2020: 10 days).
64
JERSEY ELECTRICITY
Substantial shareholdings
As at 15 December 2021 the Company has been notified of the following holdings of voting rights of 5% or more in its issued
share capital:
Equity
Ordinary Shares
The Government of Jersey hold all of the Ordinary shares which amounts to 62% of the ordinary share capital and represents 86.4%
of the total voting rights. This is held as a strategic investment in their balance sheet and not consolidated.
‘A’ Ordinary Shares
‘A’ Ordinary shares entitle the holder to 1 vote for every 100 shares held whereas the Ordinary shares carry voting rights of 1 vote
for every 20 shares held.
Huntress (CI) Nominees Limited is the largest shareholder of our listed shares and hold 5,342,849 ‘A’ Ordinary shares which
represent 5% of the total voting rights. It is understood that the underlying owners of these shares are substantially private
investors based in the Channel Islands.
Auditor
A resolution to re-appoint PricewaterhouseCoopers CI LLP as auditor will be proposed at the next Annual General Meeting.
BY ORDER OF THE BOARD
L. FLORIS
Secretary
15 December 2021
Annual Report and Accounts 2021 65
Governance
Corporate Governance
Corporate Governance
The Directors are committed to maintaining a high standard of Corporate Governance in accordance with The UK Corporate
Governance Code 2018 (“the Code”), as incorporated within The Listing Rules, issued by the Financial Conduct Authority. The Listing
Rules require the Company to set out how it has applied the main principles of the Code and to explain any instances of non-
compliance. In accordance with Listing Rule (“LR”) 9.8.4 R, the agreement related to ‘Independent business’ required by LR 9.2.2A
(2) (a) R has been entered into with the Government of Jersey, with effect from 17 November 2014. The company has complied with
the independence provisions included in the agreement during this financial year and believes the majority shareholder is also
compliant. The other applicable information required by LR 9.8.4 R (5)/(6) is disclosed in external appointments.
The Directors have reviewed, and applied, the latest UK Corporate Governance Code applicable to accounting periods beginning
on or after 1 January 2019, together with the supporting Guidance on Board Effectiveness within these financial statements.
The Code is available at www.frc.org.uk.
Statement of Compliance
At the time of signing off the 2021 Annual Report the Board considers that it has complied with the Code, except for Provision 38
(executive pensions aligned with the workforce) and this is explained in the Remuneration Report.
The Board
The Board provides effective leadership and currently comprises five non-Executive and two Executive Directors. They are
collectively responsible for the long-term success of the Company and bring together a balance of skills, experience, independence
and knowledge.
The Chairman and the Chief Executive Officer roles are divided with the former being appointed by the Directors from amongst
their number. Alan Bryce is the Senior Independent Director.
Independence
The non-Executive Directors serving at the balance sheet date were Wendy Dorman, Amanda Iceton, Alan Bryce, Phil Austin and
Tony Taylor and they were all considered independent. On appointment to the Board the required time commitment is established
and any significant changes to time commitments are notified to the Board. An induction process is in place for all newly appointed
Directors. The Board is responsible to the Company’s shareholders for the proper management of the Company. It meets regularly
to set and monitor strategy, review trading performance, perform a robust assessment of the principal risks that could threaten
the business model, future performance, solvency or liquidity (see Principal Risks section on pages 55 to 59), examine business
plans and capital and revenue budgets, formulate policy on key issues and review the reporting to shareholders. Board papers are
circulated, with reasonable notice, prior to each meeting in order to facilitate informed discussion of the matters at hand. Members
of the Board hold meetings with major shareholders to develop an understanding of the views they have about Jersey Electricity.
The following table sets out the number of meetings (including Committee meetings) held during the year under review and the
number of meetings attended by each Director.
No of meetings
Board
5
Audit and Risk
4
Remuneration Nominations
3
4
C. Ambler
P. Austin
A. Bryce
W. Dorman
A. Iceton
A. Le Cornu
M. Magee
P. Simon
T. Taylor
* attendees by invitation
5
5
5
5
5
2
5
4
5
3*
1*
4
4
4
1
4*
3
-
4*
4
-
-
4
1
3*
1
4
3
3
3
3
-
-
-
-
3
66
JERSEY ELECTRICITY
Performance Evaluation
The effectiveness of the Board is vital to the success of the Company. An external evaluation took place during 2021 using
Boardroom Dialogue Group Ltd, an external recruitment consultancy which has no connection with the Company, the findings
of which were reviewed and actions are being implemented. In the period since the last external evaluation took place in 2018,
internal evaluations, including those of Board sub-Committees, were co-ordinated by the Chairman annually. As the policy is to
have an external review every 3 years, the next one will take place in 2024. In addition, the non-Executive Directors meet at least
twice a year, without the Executive Directors being present, with an explicit topic being the performance of the Executive Directors.
Finally, the Senior Independent Director meets the other non-Executive Directors once a year to discuss the performance of the
Chairman (without his presence).
Workforce Engagement
During 2020, a workforce Culture and Engagement Forum was established with representatives from across the Company.
The Chairman of the Remuneration Committee attends this forum which provided an opportunity to gain first-hand feedback
from the workforce.
In addition, the maintenance of the right culture within Jersey Electricity remains a priority. The use of staff surveys to collect data,
the promotion of people development (through our ‘Living Leader’ and ‘How To’ programs) and a continued focus on the safety of
both our staff and customers are key tools in the delivery of this objective.
The key procedures which the Board has established to provide effective controls are:
Board Reports
Key strategic decisions are taken at Board meetings following due debate and with the benefit of Board papers circulated
beforehand. The risks associated with such decisions are a primary consideration in the information presented and discussed
by the Board who are responsible for determining the nature and extent of the risk it is willing to take to achieve the strategic
objectives. Prior to significant investment decisions being taken, due diligence investigations include the review of business plans
by the Board.
Management Structure
Responsibility for operating the systems of internal control is delegated to management.
There are also specific matters reserved for decision by the Board; and these have been formally documented and a summary of
the key types of decision made by the Board is as follows:
• Strategy and Management including:
Approval of the Company’s long-term objectives and commercial strategy.
Approval of the annual operating and capital expenditure budgets and any subsequent material changes to them.
• Changes in structure and capital of the Company
• Financial reporting and controls including:
Approval of the Annual Report and Financial Statements.
Declaration of the interim dividend and recommendation of the final dividend.
Internal controls/Risk Management
•
Reviewing the effectiveness of the internal control and risk management systems. An external review of the risk management
process is conducted every three years.
• Approval of contracts
Including material contracts, investments, capital expenditure and bank borrowings.
• Board membership and other appointments
Approval of changes to the structure, size and composition of the Board and key Committees, following recommendations from
the Nominations Committee. A Board Charter detailing the matters reserved and the roles and responsibilities of the officers of
the Company is available on our website (www.jec.co.uk).
• Remuneration
Determining the remuneration policy for the directors and other senior management, following recommendations from the
Remuneration Committee.
• Corporate governance matters
Undertaking a formal and rigorous annual evaluation of its own performance, that of its Committees and individual Directors.
Review of the Company’s overall corporate governance arrangements.
• Approval of key Company policies
These include policies on health and safety, share dealing and diversity.
Annual Report and Accounts 2021 67
Governance
Corporate Governance
Internal Audit/Risk Management
There is a permanent internal audit function involved in a continuous structured review of the Company’s systems and processes,
both financial and non-financial. Internal Audit manage the process of strategic and operational risk reviews and facilitate risk
review workshops with departmental managers. The Head of Internal Audit has direct access to the Audit and Risk Committee
Chairman and also attends ARC meetings, at which risk based internal audit plans are discussed and approved.
Personnel
The Company ensures that personnel are able to execute their duties in a competent and professional manner through its
commitment to staff training, regular staff appraisals and organisational structure.
Budgetary Control
Detailed phased budgets are prepared at profit centre level. These budgets are approved by the Board, which receives sufficiently
detailed financial data to monitor the performance of the Company with explanations of any material variances.
Audit and Risk Committee
The Audit and Risk Committee reviews the effectiveness of the internal control and risk management processes throughout the
accounting period as outlined above. In addition, it conducts “deep dive” reviews on specific identified risks to test assumptions on
the substance of such risks and their mitigation. More detail on the Group’s principal risks, and how they are managed, is provided
in the Financial Review within this Annual Report (see the Principal Risks section on pages 55-59). The ARC also reviews and
monitors the independence of the external auditors and the non-audit services provided to the Group.
Stakeholder Engagement
The Company maintains an active dialogue with its largest shareholders and meetings with Government of Jersey (which owns 62%
of our Ordinary share capital) include both the non-Executive Chairman as well as the Chief Executive. The primary responsibility
for relationship matters with listed shareholders lies with the Finance Director who reports to each Board meeting on investor
relations. Jersey Electricity also has a number of other important stakeholders including Government, the local Parishes, suppliers,
customers, employees and pensioners and regular presentations are provided to the Board on how such relationships are
managed and can be improved.
68
JERSEY ELECTRICITY Nominations Committee Report
Committee Purpose
The purpose of the Committee is to make recommendations to the Board in respect of Board composition, Board appointments,
succession planning for senior leadership roles across the Company, and to support the Board in its leadership of the Diversity and
Inclusion agenda.
Membership and meetings
I am pleased to report on the work of the Nominations Committee for the financial year ended 30 September 2021.
The Committee comprises a majority of independent non-Executive directors, the Chair of the Board and the CEO. It is supported,
when required, by the Human Resources Director and the Acting Company Secretary, and there were no changes to the
membership during the reporting period. The Committee met three times, the third meeting specifically to initiate a search process
for a new NED, following the resignation of Peter Simon on 31 August. Membership and attendance at meetings is shown below.
Meetings
Attended
Attendance
Alan Bryce (Chair)
Phil Austin
Chris Ambler
Wendy Dorman
Tony Taylor
3
3
3
3
3
3
3
3
3
3
100%
100%
100%
100%
100%
Duties of the Committee
The Terms of Reference for the Committee and the Terms of the Appointment of non-Executive Directors are available on our
website (www. jec.co.uk). A summary of the Committee’s key duties, is:
• To review regularly the structure, size, balance and overall composition of the Board, and to make recommendations with
regard to any changes, with due regard to the skills needed for the future.
• To give full consideration to the pipeline of succession at Board and Executive Leadership Team levels, and to lead the process
for any appointments to the Board.
• To support the annual Board evaluation process and to make recommendations arising, including the annual reappointment of
NEDs; and
• To support the Board in its leadership of Company culture in pursuit of greater Diversity and Inclusion.
Board Structure and Composition
During the period, the Committee considered Board structure and composition, from the perspectives of skills, diversity, and
resilience. Our previous Senior Independent Director (SID) and Remuneration Committee Chair, Aaron Le Cornu, retired at the
2021 AGM, and the Committee recommended the appointment of Alan Bryce as SID and Tony Taylor as Remuneration Committee
Chair. Neither Mr Bryce nor Mr Taylor were present when their respective positions were being considered. As part of succession
planning, Mr Le Cornu’s retirement from the Board had already been anticipated by the recruitment of Amanda Iceton in June
2020. At the end of August however, Peter Simon stood down from the Board to pursue a new business opportunity which meant
that he could no longer hold a non-executive position. The recruitment process for a new NED is therefore now underway and is
described later in this report.
The Board’s present skills mix is summarised in Table 1.
Table 1: Board Mix of Specialist Skills, Tenure and Gender
Specialist skills
Board Governance
Engineering
Digital and Cyber
Finance and Accounting
Strategy, M&A
Customers and marketing
Energy and renewables
3
2
1
3
2
1
2
Tenure
1-3 years
3-6 years
6-9 years
1
3
1
>9 years
2*
Gender
Male
Female
5
2
*The CEO and Finance Director are included in this figure.
Annual Report and Accounts 2021 69
Governance
Nominations Committee Report
Succession
The Board remains well balanced in relation to the skill sets required for the Company’s strategic direction and operational
oversight, and the Committee continues its focus on further strengthening the mix and diversity with each appointment. The
Committee also has a responsibility to consider succession at Executive Leadership Team (ELT) and Senior Leadership Team (SLT)
levels. The external Board evaluation carried out this year made two recommendations relating to the Committee, first that it
continues to review succession in the context of business needs and second, that it continues to focus on increasing diversity at
Board, ELT and SLT levels. The external Board evaluation is described more fully below.
The Committee considered succession plans for senior management roles, as well as the steps being taken to develop the
internal pipeline of candidates at both SLT and ELT levels. The Committee was pleased to note the appointment of the Director of
Technology to the ELT, bringing essential skills to the heart of executive decision-making in the business. The Committee discussed
the wider succession plans and is satisfied that the Company has an adequate pipeline of successors to senior roles, either through
internal development and promotion, or through targeted external recruitment. Some specialist skills continue to be in short
supply on-Island, and this makes it necessary to maintain a two-prong approach of internal staff development and off-Island
recruitment.
Appointments
The search for a new NED to replace Peter Simon commenced in September, following the Board’s engagement of Trusted Advisors
Partnership (TAP) on the Committee’s recommendation. On this occasion, TAP was selected due to its strengths in the target search
market and geography, and for its knowledge of our business. The search process is focused so much as possible, on replacing
the particular skills and knowledge that Peter brought to the Board, while taking account of the evolving environment in which the
Company operates and the goal of enhancing Board diversity.
Board Evaluation
This year, an external facilitator was engaged to carry out a Board Effectiveness Review covering the work of the Board and of
its committees. The Committee worked with the Chair of the Board to identify and engage Sean O’Hare of Boardroom Dialogue
as our facilitator, who was selected for his experience of diverse boards and his understanding of companies who carry the
responsibilities of providing essential energy and utility services. The review was undertaken in accordance with the principles
and provisions of the Corporate Governance Code and took the form of a facilitated self-assessment with additional commentary
on best practice where appropriate. Each director and member of the ELT plus the Company Secretary and our Board Apprentice
were interviewed, and a review of Board and Committee agendas and papers was carried out. In addition, Mr O’Hare attended a
meeting of each Committee and the Board during May and July.
The conclusions of the Review were fed back in a report which was presented to the Board in September, and contained 14
recommendations, grouped against Board Leadership and Company Purpose, Division of Responsibilities, and the work of the
Committees. The focus in Board Leadership and Company Purpose was very much driven by the Board’s ambition to ensure that
the Company both leads and supports the Island to meet its decarbonisation agenda and the recommendations are designed
to strengthen further the Board’s approach to strategy development, stakeholder engagement and our drive for an agile and
innovative corporate culture. In Division of Responsibilities, a number of helpful recommendations were made regarding in the
main, the workings and logistics of Board meetings, and for the Committees, building further on their work and the extent of
reporting. The recommendations have been translated into an action plan which will be monitored for completion during 2022.
As in other years, the Chair of the Board has also carried out a review of each director’s effectiveness, confirming that directors
continue to be able to commit the required time to their duties and are able to contribute fully to the work of the Board and its
Committees. A NEDs-only meeting was held separately, chaired by the SID, to discuss the Chair of the Board’s performance and
feedback provided, very much in line with the constructive tone of the conclusions from the External Review.
Diversity and Inclusion
The Committee and the Board maintain a strong drive to improve the levels of diversity both at Board level and across the
Company, particularly in respect of gender-balance, but increasingly with a focus on other protected characteristics. The
composition of our employees by gender is presented below:
Male
Female
Company
First Line Reports
Senior leadership team
79%
84%
88%
Executive leadership team 100%
Board
78%
21%
16%
12%
0%
22%
70
JERSEY ELECTRICITY
Our business benefits from a very committed and stable workforce, but its very stability poses a practical difficulty in effecting
rapid change in composition. Moreover, our experience in the past year when unfortunately we have been unable to recruit any
female apprentices, notwithstanding our policy insofar as possible, of gender-balanced short lists, has reminded us of the long
road we face with determination. As reported last year, there are four strands to our D&I strategy of Hiring, Schools Engagement,
Workforce Culture, and Performance and Data. In particular, the apprentice challenge demonstrates the effort that is required, and
that we continue to make, in the strands of Hiring and Schools Engagement.
We have recently started to monitor the gender pay gap position and the median pay gap between males and females in 2021 was
9.6% compared to 11.7% in 2020. Our biggest gap is in our highest paid employees due to the lower level of female representation
as discussed earlier.
The Committee was pleased to see positive progress in the strands of Workforce Culture and Performance and Data. Specifically,
building on the “Inclusion Maturity Index” developed with input from Inclusive Employers, we completed two surveys during the
year and the results show that we have improved our status from “Compliant“ to “Programmatic”. In practice our current status
demonstrates that D&I is being properly considered alongside other business priorities. An important part of this has been
the introduction of D&I Impact Assessments, which are designed to ensure that business decisions are taken in the context of
enhancing D&I for the affected stakeholders. During the year for example, the assessments delivered benefits in three customer-
facing projects, the EV charging network at Queen’s Road, the new JE website, the redevelopment of the Powerhouse shop front,
and in a staff-facing project, to re-purpose part of our office space.
It was also pleasing for the Board that in the most recent Pulse staff engagement survey, not only was the overall score marginally
up, at 8.2 overall, but female respondents recorded a score around 5% higher than their male colleagues. Taken alongside the
improvements in our Maturity Index status, these measures indicate that we are making steady progress on the strands of
Workforce Culture and Performance and Data, both of which are crucial to promoting diversity and to retaining the staff already
here who contribute to our Company’s diversity.
Finally, due to the disruption caused by COVID-19, we have agreed to extend the term of our “Board apprentice” until the AGM in
March 2022. We view these apprenticeships very positively, both in supporting the pipeline for future Board positions in Jersey, in
particular female candidates, but also in having the holders share their perspectives with us.
On behalf of the Committee
A. BRYCE
Chairman
15 December 2021
Annual Report and Accounts 2021 71
Governance
Audit and Risk Committee Report
Committee purpose
The purpose of the Committee is to support the Board with its responsibilities in relation to financial reporting, risk management
and internal controls.
The Terms of Reference for the Audit and Risk Committee are available on our website (www.jec.co.uk).
Membership and meetings
The committee is made up of independent non-executive directors. There are currently three serving members, Alan Bryce,
Amanda Iceton and myself. We have seen two changes in membership during the year. As planned, Aaron le Cornu stepped down
as a Board and Committee member at the AGM in March 2021, and more recently Peter Simon stepped down from the Board and
the Committee as explained in the Chair’s statement on page 3. I anticipate increasing the membership to four next year, however
I am satisfied that the current membership bring a good range of skills and experience, including recent and relevant financial
experience as well as industry knowledge and IT and cyber expertise. Full biographies of all members are provided on pages 60
to 63.
Four scheduled meetings were held during the year, with 100% attendance at each one. The meetings provide a forum for
discussions with both Company management and the external auditor. Meetings are attended, by invitation, by the Chair, Chief
Executive Officer, Finance Director, Financial Controller, Director of Technology and members of both the external audit and
internal audit teams. The acting Company Secretary provides secretarial support to the Committee.
Following each meeting I report to the Board on areas discussed and any topics of note and recommendations that emerged from
ARC meetings. All recommendations from the Committee during the year were accepted by the Board.
The role of the Committee
The key responsibilities of the Committee are to:
• Oversee the independence, effectiveness and remuneration of the external auditor and the quality of the audit, and
overseeing policy on the engagement of the external auditor to supply non-audit services
• Monitor the integrity of the financial statements and to report to the Board on key judgements and significant issues
contained therein
• Consider, on behalf of the Board, whether the annual report and financial statements taken as a whole are fair, balanced
and understandable and provide the information necessary for shareholders to assess the Company’s position and
performance, business model and strategy
• Review and challenge the effectiveness of the Company’s internal controls and risk management processes
• Oversee the review and testing carried out by the internal audit function on the effectiveness of the Company’s internal
controls
• Monitor principal and emerging risks and the robustness of the risk management framework
Key activities during the year
In carrying out its annual responsibilities as set out in the Corporate Governance Code, specific areas of focus this year included:
• An in-depth review of the Company’s risk appetite and linkage with principal risks
• Review of a report by an external consultant on the effectiveness of our risk management controls and processes
• An analysis of lessons learnt from the Company’s response to COVID-19
• Receiving reports from the Director of Technology on enhancements to the Company’s IT systems, data privacy and cyber
security control effectiveness
Further details can be found in the relevant section below.
Whistleblowing policy
The Committee is responsible for reviewing the Company’s Whistleblowing or Speak Up policy and management’s response to any
concerns raised through this channel. The policy was reviewed by the Committee during the year. No Speak Up incidents occurred
during the year.
External auditors
PricewaterhouseCoopers CI LLP (“PwC”) replaced Deloitte as our auditor as a result of a tender process for the external audit in
early 2020, and they continued as our external auditor during the year. The Committee review PwC’s independence, effectiveness,
quality and objectivity annually. We considered the 2020 audit, the first carried out by PwC, to be effective and of a high quality. The
auditor’s took time to get to know our business and we benefitted from a fresh perspective on our financial reporting controls and
disclosures in the financial statements.
The Committee met separately with the external auditor without management present and I met the engagement leader, Lisa
McClure, to discuss any matters which she would like to raise.
72
JERSEY ELECTRICITY The Committee will continue to keep under review all aspects of the relationship with the external auditor and will initiate its
next tender process at what is deemed an appropriate time taking into consideration the period since the last tender. Non-
audit services are reviewed on a case-by-case basis. As disclosed in Note 6 to the Financial Statements, no non-audit services
were provided by PwC in the year. The effectiveness of the external audit is considered on an ongoing basis driven primarily by
discussions with the external auditor and finance team on the maintenance of audit quality, reports presented to the Committee by
the audit team in connection with the year end audit, and a meeting each January to discuss learnings from the audit process that
has just been completed for the prior year. Confirmation of auditor independence was received from PwC during the audit process.
The Committee has approved the external auditor’s remuneration and terms of engagement and is fully satisfied with the
performance, objectivity, quality of challenge and independence of the external auditor.
Viability and going concern
The Committee assessed the going concern and viability statements in the annual accounts. This involved consideration of
principal and emerging risks to the business and the suitability of the five year period adopted in the viability statement. The
Committee took into account the five year plan that was refreshed in September 2021 and reviewed by the Board, and stress
testing carried out by management based on severe but plausible scenarios.
The Committee was satisfied that a robust assessment has been made by management of the risks that could threaten the
Company’s future performance, solvency and liquidity, and recommended to the Board that the going concern and viability
statements could be approved.
UK Corporate Governance Code
In 2020 the Company reported under the 2018 Corporate Governance Code for the first time. In preparing the Annual Report
and Financial Statements for 2021 the Committee, Board and management have taken into account the feedback and
recommendations of the FRC in its annual letter to CEOs, CFOs and ARC chairs and its review of corporate governance reporting,
both of which were published in November 2020, and also took cognisance of other FRC guidance that is regularly issued. We
continually strive to meet the expectations of public company reporting and enhance the quality of stakeholder communications.
Fair, balanced and understandable
As part of the review of the annual and interim financial statements, the Committee reviews the significant issues and in particular
any critical accounting judgements identified by the Company and discussed with the external auditor, which are disclosed in Note
2 to the Financial Statements (Critical Accounting Judgements and key sources of estimation uncertainty). Comprehensive position
papers on each key area are produced by the Finance team at both the half and full year. Some of the areas are recurring items
such as revenue recognition, impairment of assets and retirement benefit obligations. In addition, provisioning for bad debts
received focus during the COVID-19 crisis. The Committee reviews any year-on-year changes in methodology for reasonableness
and assesses the impact of any new accounting policies.
The Committee is also responsible for monitoring the controls which are in force (including financial, operational and compliance
controls and risk management procedures) to ensure the integrity of the financial information reported to stakeholders. The
Committee considers reports from the internal and external auditors and from management and provides comment on salient
issues to the Board.
On behalf of the Board, the Committee considered whether the 2021 annual report and financial statements taken as a whole are
fair, balanced and understandable, and whether the disclosures are appropriate. The Committee reviewed the Group’s procedures
around the preparation, review and challenge of the report and consistency of the narrative sections within the financial
statements and the use of alternative performance measures and associated disclosures. The Committee also considers any
potential inconsistencies raised by the external auditor.
Following its review, the Committee is satisfied that the Annual Report is fair, balanced and understandable, and provides the
information necessary for shareholders and other stakeholders to assess the Company’s position and performance, business
model and strategy, and has advised the Board accordingly.
Internal Control and Risk Management
The Board is responsible for establishing and maintaining the Company’s system of internal control and for the management of
risk. Internal control systems are designed to meet the particular needs of the business and the risks to which it is exposed, and
by their nature can provide reasonable but not absolute assurance against material misstatement or loss. Oversight of the risk
management framework and internal controls is delegated to the Committee.
Annual Report and Accounts 2021 73
Governance
Audit and Risk Committee Report
Internal Audit
Committee members have regular meetings with Internal Audit to evaluate both performance, and any impediments that might
exist, which would constrain their work. The Head of Internal Audit has a direct reporting line to myself and reports operationally
to the Finance Director. The ARC approves the programme of work on an annual basis and monitors results and follow up actions,
reporting to the Board on any significant findings. The review of reports provided by Internal Audit and the monitoring of action
points relating to findings provides the Committee and the Board with comfort over the functioning of internal controls.
The Company’s internal audit activities are carried out by our internal audit team, with some audits outsourced to BDO or
other third-party suppliers overseen by the Head of Internal Audit. This year we have strengthened our internal audit team and
transitioned to a new and improved platform. The scope of internal audit reviews has been refreshed which has allowed us to
identify areas in which controls can be strengthened.
Risk Management
During the year the ARC carried out an in-depth review of the Company’s risk appetite. These discussions led to some
recommended changes to the categorisation of risk appetite, and mapping to principal risks. These proposals were presented
to the Board in an ad hoc meeting, using a potential business opportunity example to lead the Board through the process of
assessing such opportunities using the risk appetite framework. Further discussions ensued, and a revised risk appetite statement
was adopted by the Board in September.
A risk management review was commissioned during the year to assess the Company’s overall risk maturity. The report concluded
that the Company is in most respects at the “Developing” level, with recommendations which could allow it to move towards
an “Integrated” rating. The recommendations were discussed by the Committee and appropriate actions agreed. One of the
recommendations related to the Company’s risk appetite statement, and we involved the author of the report in our discussions
on risk appetite noted above. The report also highlighted that the Company does not have a risk management function separate
from our internal audit function. In order to address this we have reviewed checks and balances and in particular reporting lines to
ensure the effectiveness of our risk management processes.
The Committee reviewed the risk register and discussed risks that were increasing, decreasing or static, together with a review of
the effectiveness of mitigations. New and emerging risks were also considered. Further details are set out in the Financial Review
on pages 51 to 54.
As the Company becomes more reliant on electronic data in its day to day activities and interactions with clients, the
appropriateness of data security controls is continually evaluated by the Company and Board. Resources and skills in this area
have been strengthened during the year, and the Committee receives and considers regular reports from the Head of Technology
as well as from the Head of Internal Audit on the robustness of controls and enhancements to the controls environment. This will
remain an area of focus for the coming year.
The ongoing risks associated with COVID-19, and corresponding risk management controls put in place, were monitored by the
Committee, including a review of lessons learnt from the pandemic response. The review found that the response was effective in
managing the risks heightened by the pandemic, with some minor enhancements recommended to the Business Continuity Plan.
I would like to thank members of the Committee, management and PwC for their continued support throughout the year.
On behalf of the Committee
W. DORMAN
Chairman
15 December 2021
74
JERSEY ELECTRICITY Governance
Remuneration Committee Report
I took on the role of Remuneration Committee Chair on 4 March 2021, replacing Aaron Le Cornu who retired on that date. I would
like to thank Aaron for all his hard work over the years and for his guidance during our handover discussions.
On behalf of the Board, I am pleased to present the Remuneration Committee’s (the “Committee”) report for the financial year
ended 30 September 2021. I would also like to thank the other Committee members for their valuable help during the last year,
being Phil Austin, Peter Simon and Amanda lceton.
The terms of reference for the Committee have been updated during the course of this year, in line with the The UK Corporate
Governance Code, and approved by the Board, and these are available on the Company’s website (www.jec.co.uk).
Four Committee meetings took place during the last financial year with 100% attendance by all Committee members.
Remuneration Policy
In line with the authority delegated by the Board, the Committee determines the remuneration for the Chair, the Executive
Directors, and the broader senior management team. It also reviews the workforce remuneration and related policies.
The Committee’s key considerations in reviewing Executive Directors’ remuneration included alignment with the strategic
objectives of the business and the extent to which remuneration will attract, motivate, and retain the talent needed to achieve
the long-term success of the Company. The Committee aims to set remuneration packages for the Executive directors that reflect
the market for similarly sized roles and fairly reward them for their contribution to the overall performance of the Company.
Remuneration packages comprise basic salary and benefits together with a performance related annual bonus. Benefits for
Executive Directors principally consist of membership of the pension scheme, a car or car allowance, private health care and a
subsidised loan to assist with housing.
The salary and benefits for the Executive team are reviewed by the Committee each October. In recent years, we commissioned
a third-party provider to undertake a comprehensive review of the competitor landscape to benchmark the remuneration for our
Executive Directors and to advise on the design of the Executive bonus scheme. This benchmarking made reference to comparable
companies in the UK/EU, as this is considered the relevant labour market for the skills required. The Committee also makes use of
locally focussed benchmarking data.
To ensure we remain vigilant and current in our approach, we will be conducting a similar exercise looking at remuneration policy
and benchmarking Executive and non-Executive remuneration during the next financial year, under the auspices of executive
remuneration consultants Mercer Kepler.
During the year, the Committee approved salary increases of 2.5% for the Executive directors. These increases were in line with the
increases awarded to the wider employee population.
Variable component of Executive remuneration
The Executive annual bonus is designed to promote the long-term success of Jersey Electricity and progress on delivering the
vision and strategy. The bonus payable to the Executive Directors is performance related, taking account of delivery against both
corporate and personal objectives which are agreed by the Remuneration Committee, and approved by the Board, before the start
of the financial year. The corproate objectives are set out in the Corprorate Scorecard. This Corporate Scorecard is also shared
across the wider management team to ensure alignment of understanding regarding priorities. The Corporate Scorecard covers
the core measures of client service/satisfaction, employee engagement, health and safety, financial performance and delivery
on key strategic objectives. For example, during the year to September 2021, key strategic objectives in the Corporate scorecard
included delivering renewable projects and enhancing the stakeholder engagement programme. Consideration was also given to
the effectiveness of the contingency planning that was implemented during the COVID-19 crisis.
Each Executive Director has a maximum cap on their total variable pay. These maximum total variable awards are payable for
outstanding performance only. The bonus scheme was amended in 2019 to allow the Committee the discretion to defer up to 50%
of the award for a period of two years, with the ultimate pay-out linked to movements in the listed share price in the period before
vesting. The bonuses paid to the Executive Directors, as shown in the table below, exclude a 40%-45% deferment of the total bonus
for two years until October 2022. The deferred amounts were £63,000 and £35,200 for C.J Ambler and M.P. Magee respectively set
when the share price was £5.29. The deferred element of the bonus is subject to malus and clawback provisions.
Annual Report and Accounts 2021 75
Governance
Remuneration Committee Report
The remuneration paid, or estimated to be payable, to Directors for the year ended 30 September 2021 was as follows:
EXECUTIVE DIRECTORS
C. Ambler
M. Magee
NON-EXECUTIVE DIRECTORS
P. Austin
A. Bryce
W. Dorman
A. Iceton
A. Le Cornu (retired 4 March 2021)
P. Simon (resigned 31 August 2021)
T. Taylor
Total
Basic
salary/fees
£
256,336
203,954
43,000
27,000
28,000
25,000
11,475
22,917
24,150
Bonus
paid
in year
£
77,000
52,800
-
-
-
-
-
-
-
Bonus
deferred
in year
£
Benefits
in kind
£
Total
2021
£
Total
2020
£
63,000
35,200
15,970
13,004
412,306
400,527
304,958
296,916
-
-
-
-
-
-
-
1,882
1,882
1,882
1,882
813
1,729
1,882
44,882
28,882
29,882
26,882
12,288
24,646
26,032
44,850
30,350
29,850
8,971
28,850
30,350
24,850
641,832
129,800
98,200
40,926
910,758
895,514
Service Contracts
The Executive Directors’ service contracts provide for a notice period of six months and they are put forward for annual re-election
at each Annual General Meeting (AGM). The non-Executive Directors’ service contracts have no unexpired term at the time of
election, or re-election, at the AGM.
Pension Benefits
The Company has two pension plans available to employees – a defined benefit scheme, which closed to new members in 2013,
and a defined contribution scheme which remains open to all staff. Both Executive Directors are members of the defined benefit
scheme which has a contribution rate of 20.6% for the employer, and 6% for the employee. In terms of proportion of employees in
either scheme there are currently 54% in the defined benefit scheme and 46% in the defined contribution scheme i.e., the majority
are in the former. In addition, it was agreed by the Board at the time of the Chief Executive’s appointment that he would participate
in a non-contributory version of the defined benefit scheme (refer to page 66 and the Statement of Compliance section, noting
Provision 38 of the Code).
Set out below are details of the pension benefits to which each of the Directors is entitled. These pensions are restricted to the
scheme in which the Director has earned benefits during service as a Director but include benefits under the scheme for service
both before and after becoming a Director, including any service transferred into the scheme from a previous employment.
Increase
in accrued
pension during
the year1
Accrued
pension at
30.9.20212
Transfer
value at
30.9.20213
Transfer
value at
30.9.20203
Directors’
contributions
during year
Increase/
(decrease) in
transfer value
less Directors
contributions4
C.J. Ambler
M.P. Magee5
£5,903
£5,962
£70,112
£106,820
£1,421,328
£2,330,218
£1,407,203
£2,453,132
-
£12,237
£14,125
£(135,151)
Notes
1. The increase in accrued pension during the year represents the additional accrued pension entitlement at the year-end compared to the previous year end. The employer
cash contributions during the year were £68,185 and £42,015 for C.J. Ambler and M.P. Magee respectively.
2. The pension entitlement shown is that which would be paid annually on retirement at age 60, based on service at the year end.
3. The transfer values have been calculated using the basis and method appropriate at each accounting date. It is assumed that the deferred pension commences from the
earliest age at which the member can receive an unreduced pension. The transfer values include any accrued Additional Voluntary Contributions (AVC) pensions.
4. The increase/(decrease) in transfer value over the year is after deduction of contributions made by the Director during the year.
5. Along with all other Scheme members, Directors have the option to pay AVCs to the Scheme to purchase additional final salary benefits. AVCs paid by the Directors during
the year were nil.
76
JERSEY ELECTRICITY
CEO pay ratio
The CEO pay ratio is being disclosed for the first time in 2021. This reflects how the total remuneration of the CEO compares to
the rest of the employees in the organisation at the 25th, 50th, and 75th percentiles. The table below shows the data for the last
3 years which is relatively static with annual movements mainly due to the changing mix of employees, and their pay, within the
organisation.
Year
2019
2020
2021
25th %ile
50th %ile
75th %ile
11.5
11.1
11.4
8.6
8.3
8.8
5.9
5.9
6.3
Share Schemes
At the 2011 AGM approval was granted to launch an all-employee share scheme. To date, 4 tranches of shares have been issued
to employees with total shares of 300 having vested and the last tranche of 100 shares issued during the 2020 financial year being
due to vest in September 2023. There are no other share-based incentives such as option schemes or long-term incentive plans
operated by the Company. However, the Committee has the discretion to defer up to 50% of the performance bonus to Executive
Directors for a period of two years with the ultimate pay-out linked to movements in the listed share price in the period before
vesting.
Workforce engagement
Under the most recent changes to the UK Corporate Governance Code, committees are required to disclose more details on
workforce engagement and wider remuneration considerations. As detailed elsewhere in the Annual Report, the Company has
conducted employee surveys for a number of years which provide very valuable data on employee engagement across a number
of factors, including remuneration. Employee engagement is a key aspect of the Corporate Scorecard. In addition, each year
the Committee is provided with a paper setting out details of all employee pay and workforce policies across the Company. The
discussions on this topic provide us with helpful insights for framing executive pay considerations.
During the 2021 financial year, the workforce Culture and Engagement Forum met twice. I was pleased to be able to attend this
forum in August, following the previous one attended by Aaron prior to his departure, which provided an ideal opportunity to gain
first hand feedback from the workforce. In the course of these discussions, it was clear that employees valued the support and
flexibility provided during the COVID-19 crisis.
Non-Executive Directors’ Remuneration
The remuneration of the non-Executive Directors is determined by the Chair of the Company and the Executive Directors with the
assistance of independent advice concerning comparable organisations and appointments and considering the Committees in
which they are involved. As with Executive Director pay, Mercer Kepler were used to provide such advice. A small premium was
paid in the financial year to those who chaired Committees (Audit and Risk: £5,000; Nomination/Remuneration: £2,000) and to
those who were members of the ARC (£2,000) for additional responsibility and to Directors based off-Island (£3,000) for travelling
time. Alan Bryce and Peter Simon, who as Directors based off-Island, would normally receive a travelling time allowance (£3,000),
voluntarily waived this annual allowance because they were unable to travel to Jersey due to COVID-19 travel restrictions during
this financial year.
External Appointments
The Company encourages Executive Directors to broaden their experience by accepting non-Executive appointments to companies
or other organisations outside the Group. Such appointments are subject to prior approval by the Board, having taken into
consideration the expected time commitments, and the Board also determines the extent to which any fees may be retained by the
Director. At the balance sheet date, the external appointments held by Executive Directors, excluding those directly connected with
their employment by the Company, were as follows:
C.J. Ambler
Foresight Solar Fund Ltd and Apax Global Alpha Ltd
The total non-Executive Director fees for such appointments were £96,429 of which £77,143 was retained by the individual, and the
remainder paid to the Company.
M.P. Magee
Jersey Post International Ltd
The non-Executive Director fee for the above appointment was £25,000 of which £20,000 was retained by the individual and the
remainder paid to the Company. In addition, another appointment was held for part of the financial year, with Aberdeen Standard
Capital Offshore Strategy Fund Ltd. The fee for that appointment was £10,000 of which £8,000 was retained and the remainder
paid to the Company.
Annual Report and Accounts 2021 77
Governance
Remuneration Committee Report
Directors’ Loans
At the time of hiring the Executive Directors, and bringing them over to live in Jersey, the Company provided secured loans to
assist them with the purchase of a residential property on the Island. Since then, substantial repayments have been made by the
Executive Directors and the remaining loan balance was:
C.J. Ambler
30.9.2021
£300,000
30.9.2020
£300,000
Directors’ Share Interests
The Directors’ beneficial interests in the shares of the Company at 30 September 2021 were:
C. Ambler*
M. Magee*
P. Austin
A. Bryce
W. Dorman
T. Taylor
‘A’ Ordinary Shares
5% and 3.5%
Preference Shares
2021
2020
2021
2020
7,620
13,800
5,000
4,500
3,500
5,000
7,620 -
13,800
5,000
4,500 -
3,500 -
5,000 -
960
-
-
960
-
-
-
-
39,420
39,420
960
960
* Both C.J. Ambler and M.P. Magee have a beneficial interest in a further 100 ‘A’ Ordinary Shares that are due to vest from the all-employee share scheme in September 2023.
There have been no other changes in the interests set out above between 30 September 2021 and 15 December 2021.
On behalf of the Committee
T. TAYLOR
Chairman
15 December 2021
78
JERSEY ELECTRICITY
Statement of Directors’ Responsibilities
Directors’ Responsibilities for the Financial Statements
The Directors are responsible for preparing the Annual Report, Directors’ Remuneration Report and the Financial Statements in
accordance with applicable law and regulations.
Companies (Jersey) Law 1991 (“Company Law”) requires the Directors to prepare Financial Statements for each financial year. The
Directors are required by the IAS Regulation to prepare the Group Financial Statements under IFRS as adopted by the European
Union. The Financial Statements are also required by Company Law to give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that period.
International Accounting Standard 1 requires that Financial Statements present fairly for each financial year the Group’s financial
position, financial performance and cash flows. This requires the faithful representation of the effects of transactions, other
events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set
out in the International Accounting Standards Board’s ‘Framework for the preparation and presentation of financial statements’.
In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable IFRS. However, Directors are
also required to:
• properly select and apply accounting policies;
• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable
information;
• provide additional disclosures when compliance with the specific requirements in IFRS are insufficient to enable users to
understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial
performance; and
• make an assessment of the Company’s ability to continue as a going concern.
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the
financial position of the Company and Group and enable them to ensure that the financial statements comply with the Companies
(Jersey) Law 1991. They are also responsible for safeguarding the assets of the Company and Group and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company’s website. Legislation in Jersey and in the United Kingdom governing the preparation and dissemination of Financial
Statements may differ from legislation in other jurisdictions.
The Directors consider that the Group has adequate resources to continue in operational existence for the foreseeable future.
The Financial Statements are therefore prepared on a going concern basis. Further details of the Group’s going concern review are
provided in note 1 of the financial statements on page 90.
Having taken advice from the ARC, the Board considers the Annual Report and financial statements, taken as a whole, to be fair,
balanced and understandable and that they provide the information necessary for shareholders to assess the Company’s and
Group’s performance, business model and strategy.
Responsibility Statement
We confirm that to the best of our knowledge:
•
•
the financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the European
Union, give a true and fair view of the assets, liabilities, financial position and profit of the Company and the undertakings
included in the consolidation taken as a whole; and
the management report includes a fair review of the development and performance of the business and the position of the
Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks
and uncertainties that they face.
By order of the Board
C.J. AMBLER
Chief Executive Officer
15 December 2021
M.P. MAGEE
Finance Director
15 December 2021
Annual Report and Accounts 2021 79
Governance
Independent Auditor’s Report
to the members of Jersey Electricity plc
Report on the audit of the consolidated financial statements
Our opinion
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of Jersey
Electricity plc (the “company”) and its subsidiary (together “the group”) as at 30 September 2021, and of their consolidated financial
performance and their consolidated cash flows for the year then ended in accordance with International Financial Reporting
Standards as adopted by the European Union and have been properly prepared in accordance with the requirements of the
Companies (Jersey) Law 1991.
What we have audited
The group’s consolidated financial statements comprise:
•
•
•
•
•
•
the consolidated balance sheet as at 30 September 2021;
the consolidated income statement for the year then ended;
the consolidated statement of comprehensive income for the year then ended;
the consolidated statement of changes in equity for the year then ended;
the consolidated statement of cash flows for the year then ended; and
the notes to the consolidated financial statements, which include significant accounting policies and other
explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of
our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the consolidated
financial statements of the group, as required by the Crown Dependencies’ Audit Rules and Guidance. We have fulfilled our other
ethical responsibilities in accordance with these requirements.
Our audit approach
Overview
Materiality
• Overall group materiality: £954,000 (2020: £740,000) based on 5% of profit from operations before
Materiality
taxation.
• Performance materiality: £715,500.
Audit scope
• We conducted our audit work in Jersey.
• We tailored the scope of our audit taking into account the operations of the group, the accounting
processes and controls, and the industry in which the group operates.
• The group is based solely in Jersey and the consolidated financial statements are a consolidation of
the company and Jersey Deep Freeze Limited, a subsidiary which also operates in Jersey.
• Based on its contribution to group profit from operations before taxation and total assets as a
percentage of the total, the subsidiary was determined to be a non-significant component. Our
audit work was therefore focused on the company.
Key audit matters
• Recognition of energy and retail revenue.
• Assessment of pension assumptions applied in the valuation of defined benefit obligation.
• Adjustment of prior year error in relation to overstatement of revenue and trade and other
receivables.
Audit
Scope
Key Audit
Matters
80
JERSEY ELECTRICITY The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated
financial statements. In particular, we considered where the directors made subjective judgements; for example, in respect of
significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain.
As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters,
consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated
financial statements of the current period. These matters, and any comments we make on the results of our procedures thereon,
were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Key audit matter
How our audit addressed the Key audit matter
Recognition of energy and retail revenue
Refer to note 1 (Accounting policies), and note 3 (Business
segments) to the financial statements.
We obtained an understanding and evaluated the overall
control environment around the recognition of revenue from
energy and retail.
The group recognised £89.9m of energy revenue (2020:
£85.3m) and £19.9m of retail revenue (2020: £17.9m).
Our approach to revenue from the energy segment was based
on data analytics as follows:
Revenue from the energy segment comprises charges for
the consumption of electricity by customers and service
connections.
We evaluated the operating effectiveness of the IT General
Controls surrounding the smart meter, billing and general
ledger systems.
Revenue from the retail segment is derived from the sale of
consumer products in the company’s
“Powerhouse” store and online.
Energy and retail revenue are material to the financial
statements and revenue recognition was identified as an area
of focus in the audit plan we presented to the Audit and Risk
Committee.
We traced data from the meter reading systems to the general
ledger system to ensure the data had been completely and
accurately transferred.
We applied approved tariff rates to the readings from the
general ledger system and recalculated the expected revenue.
We reconciled the expected revenue to the invoices raised to
customers from the general ledger system.
For the retail segment:
We evaluated the operating effectiveness of the IT General
Controls surrounding the electronic point-of-sale (“EPOS”) and
general ledger systems.
We performed a margin analysis between cost of sales and
revenue based on the data obtained from the general ledger.
The margin analysis was based on tests of detail performed
on the cost of sales by agreeing a sample of expenses to
supporting documentation.
For both energy and retail revenue, we matched revenue from
the general ledger system to receipts in the bank statement
using data analytics.
We investigated unmatched items and performed tests of detail
on them, and ensured they tied through to other asset accounts
or were offset against other liability accounts (e.g. customer
deposits).
No matters were identified that required reporting to those
charged with governance.
Annual Report and Accounts 2021 81
Governance
Independent Auditor’s Report
to the members of Jersey Electricity plc
Key audit matter
How our audit addressed the Key audit matter
Assessment of pension assumptions applied in the valuation of
defined benefit obligation
Refer to note 1 (Accounting policies), note 2 (Critical accounting
judgements and key sources of estimation uncertainty), and note
17 (Pensions) to the financial statements.
The group has a defined benefit pension plan that was
recognised as a net surplus of £18.8m at the year-end (2020:
£7.3m). This comprises estimated plan liabilities of £142.3m
(2020: £149.3m) and plan assets of £161.1m (2020: £156.6m).
The valuation of the plan liabilities requires significant levels
of judgement, estimates and technical expertise including
the use of actuarial assessment to support the directors in
selecting appropriate assumptions. Changes in a number
of key financial and demographic assumptions (including
discount rates, salaries increase, inflation, and mortality rates)
can have a material impact on the calculation of the pension
obligation.
The group used an independent qualified actuary to assess
the defined benefit obligation at year end.
We obtained an understanding and evaluated the overall
control environment around the defined benefit obligation.
We used our auditor’s experts to evaluate the assumptions
made in relation to the valuation of the scheme liabilities.
We compared the various assumptions used to our auditor’s
expert’s internally developed benchmarks; considered the
consistency and appropriateness of methodology and
assumptions applied compared to the prior year end and the
most recent actuarial valuation.
We tested the completeness and accuracy of the retirement
benefit obligation disclosures.
We confirmed that the group’s actuarial experts are qualified,
appropriately affiliated to third party industry bodies and are
independent of the group.
No matters were identified that required reporting to those
charged with governance.
Adjustment of prior year error in relation to overstatement of
revenue and trade and other receivables
Refer to note 2 (Critical accounting judgements and key sources of
estimation uncertainty) and note 14 (trade and other receivables
We obtained an understanding of the nature of the error from
management and having assessed applicable accounting
standards we concluded that this met the definition of a prior
year adjustment.
During our audit, management identified an error in the
prior year reported trade and other receivables balance
related to historical overstatement of revenue from pay-as-
you-go customers. The error was identified as a result of the
discontinuation of a legacy system.
We determined the prior year adjustment to be a key audit
matter as an area that required significant auditor and
management attention during the performance of our audit.
We evaluated management’s judgement that the error occurred
in a period prior to the earliest comparative information
presented.
To obtain evidence over the completeness and accuracy of the
adjustment, we reviewed the trade receivables listing as at 30
September 2021 to confirm there were no material trade and
other receivables recognised in relation to meters that have
been scrapped.
On a sample basis, we compared the listing of meters included
in the calculation of the adjustment to data from the metering
system to make sure the adjustment related only to scrapped
meters.
We analysed the appropriateness of adjustments made to
reported trade and other receivables and retained earnings for
the prior year and prior year opening balances.
We evaluated the disclosures in the financial statements with
respect to the adjustment for completeness and compliance
with the requirements of applicable accounting standards.
No matters were identified that required reporting to those
charged with governance.
82
JERSEY ELECTRICITY How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the consolidated
financial statements as a whole, taking into account the structure of the group, the accounting processes and controls, and the
industry in which the group operates.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of
our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements,
both individually and in aggregate on the consolidated financial statements as a whole.
Based on our professional judgement, we determined materiality for the consolidated financial statements as a whole as follows:
Overall group materiality
£954,000 (2020: £740,000)
How we determined it
5% of profit from operations before taxation
Rationale for benchmark applied
We believe that group profit from operations before taxation is the most
appropriate benchmark because this is the key metric of interest to members.
It is also a generally accepted measure used for companies in this industry.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope
of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example
in determining sample sizes. Our performance materiality was 75% of overall materiality, amounting to £715,500 for the group
financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was
appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £47,500
(2020: £37,000) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Reporting on other information
The directors are responsible for the other information. The other information comprises all the information included in the Annual
Report and Accounts 2021 (the “Annual Report”) but does not include the consolidated financial statements and our auditor’s report
thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to
report based on these responsibilities.
Responsibilities for the consolidated financial statements and the audit
Responsibilities of the directors for the consolidated financial statements
As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the preparation of the
consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards as
adopted by the European Union, the requirements of Jersey law and for such internal control as the directors determine is necessary
to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the consolidated financial statements, the directors are responsible for assessing the group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the group or to cease operations, or have no realistic alternative but to do so.
Annual Report and Accounts 2021 83
Governance
Independent Auditor’s Report
to the members of Jersey Electricity plc
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations.
We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the population from which the sample is selected.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout
the audit. We also:
•
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
group’s ability to continue as a going concern over a period of at least twelve months from the date of approval of the financial
statements. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and
whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance
in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Use of this report
This report, including the opinions, has been prepared for and only for the members as a body in accordance with Article 113A of
the Companies (Jersey) Law 1991 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility
for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
84
JERSEY ELECTRICITY Report on other legal and regulatory requirements
Company Law exception reporting
Under the Companies (Jersey) Law 1991 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit;
• proper accounting records have not been kept; or
•
the consolidated financial statements are not in agreement with the accounting records.
We have no exceptions to report arising from this responsibility.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the
corporate governance statement relating to the company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review. Our additional responsibilities with respect to the corporate governance statement as other information are
described in the Reporting on other information section of this report
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the consolidated financial statements and our knowledge obtained during the
audit, and we have nothing material to add or draw attention to in relation to:
• The directors confirmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks
and an explanation of how these are being managed or mitigated;
• The directors’ statement in the consolidated financial statements about whether they considered it appropriate to adopt the
going concern basis of accounting in preparing them, and their identification of any material uncertainties to the group’s ability
to continue to do so over a period of at least twelve months from the date of approval of the consolidated financial statements;
• The directors’ explanation as to their assessment of the group’s prospects, the period this assessment covers and why the period
is appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the company will be able to continue in operation
and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to
any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the group was substantially less in scope than an
audit and only consisted of making inquiries and considering the directors’ process supporting their statements; checking that
the statements are in alignment with the relevant provisions of the UK Corporate Governance Code (the “Code”); and considering
whether the statement is consistent with the consolidated financial statements and our knowledge and understanding of the group
and its environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
corporate governance statement is materially consistent with the consolidated financial statements and our knowledge obtained
during the audit:
• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess the group’s position, performance, business model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
• The section describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s
compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing
Rules for review by the auditors.
LISA McCLURE
for and on behalf of
PricewaterhouseCoopers CI LLP
Chartered Accountants and Recognized Auditor
Jersey, Channel Islands
15 December 2021
Annual Report and Accounts 2021 85
Financial Statements
Consolidated Income Statement
for the year ended 30 September 2021
Revenue
Cost of sales
Gross profi t
Revaluation of investment properties
Operating expenses
Group operating profi t
Finance income
Finance costs
Profi t from operations before taxation
Taxation
Profi t from operations after taxation
Attributable to:
Owners of the Company
Non-controlling interests
Earnings per share
- basic and diluted
Note
3
11
4
3
7
19
9
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2021
Note
17
7
22
7
Profi t for the year
Items that will not be reclassifi ed subsequently to profi t or loss:
Actuarial gain/(loss) on defi ned benefi t scheme
Income tax relating to items not reclassifi ed
Items that may be reclassifi ed subsequently to profi t or loss:
Fair value (loss)/gain on cash fl ow hedges
Income tax relating to items that may be reclassifi ed
Total comprehensive income for the year
Total comprehensive income for the year
Attributable to:
Owners of the Company
Non-controlling interests
All results in the year have been derived from continuing operations.
The notes on pages 90 to 116 form an integral part of these accounts. The independent auditor’s report is on pages 80 to 85.
86
JERSEY ELECTRICITY
2021
£000
118,608
118,608
(74,159)
(74,159)
44,449
44,449
6,055
6,055
(29,991)
(29,991)
20,513
20,513
112
112
(1,540)
(1,540)
19,085
19,085
(2,794)
(2,794)
16,291
16,291
16,155
16,155
136
136
16,291
16,291
2020
2020
£000
£000
111,747
111,747
(69,695)
(69,695)
42,052
42,052
515
515
(26,360)
(26,360)
16,207
16,207
139
139
(1,516)
(1,516)
14,830
14,830
(3,090)
(3,090)
11,740
11,740
11,624
11,624
116
116
11,740
11,740
52.73p
52.73p
37.94p
37.94p
2021
£000
2020
2020
£000
£000
16,291
16,291
11,740
11,740
14,803
14,803
(2,961)
(2,961)
11,842
11,842
(3,116)
(3,116)
623
623
(2,493)
(2,493)
25,640
25,640
25,504
25,504
136
136
25,640
25,640
(1,663)
(1,663)
333
333
(1,330)
(1,330)
1,290
1,290
(258)
(258)
1,032
1,032
11,442
11,442
11,326
11,326
116
116
11,442
11,442
Consolidated Balance Sheet
as at 30 September 2021
Non-current assets
Intangible assets
Property, plant and equipment
Right of use assets
Investment properties
Trade and other receivables
Retirement benefi t asset
Derivative fi nancial instruments
Other investments
Total non-current assets
Total non-current assets
Current assets
Inventories
Trade and other receivables
Derivative fi nancial instruments
Cash and cash equivalents
Total current assets
Total assets
Total assets
Liabilities
Trade and other payables
Current tax liabilities
Lease liabilities
Derivative fi nancial instruments
Total current liabilities
Net current assets
Net current assets
Non-current liabilities
Trade and other payables
Lease liabilities
Derivative fi nancial instruments
Financial liabilities - preference shares
Borrowings
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Net assets
Equity
Share capital
Revaluation reserve
ESOP reserve
Other reserves
Retained earnings
Equity attributable to the owners of the Company
Non-controlling interests
Total equity
Total equity
Approved by the Board on 15 December 2021
Note
2021
£000
2020
2020
£000
£000
Restated
Restated
2019
2019
£000
£000
Restated
Restated
10
11
11
11
14
17
22
12
13
14
22
15
7
22
15
16
22
18
16
7
18
19
933
933
216,550
216,550
3,113
3,113
27,810
27,810
308
308
18,761
18,761
108
108
5
5
267,588
267,588
6,909
6,909
18,000
18,000
-
-
43,136
43,136
68,045
68,045
335,633
335,633
18,373
18,373
3,020
3,020
72
72
1,256
1,256
22,721
22,721
45,324
45,324
24,006
24,006
3,035
3,035
874
874
235
235
30,000
30,000
29,321
29,321
87,471
87,471
110,192
110,192
225,441
225,441
1,532
1,532
5,270
5,270
(79)
(79)
(1,618)
(1,618)
220,178
220,178
225,283
225,283
158
158
225,441
225,441
479
479
217,936
217,936
2,899
2,899
21,755
21,755
300
300
7,315
7,315
277
277
5
5
250,966
250,966
6,028
6,028
15,745
15,745
960
960
35,520
35,520
58,253
58,253
309,219
309,219
18,193
18,193
2,742
2,742
65
143
143
21,143
21,143
37,110
37,110
22,714
22,714
2,879
2,879
-
-
235
235
30,000
30,000
27,209
27,209
83,037
83,037
104,180
104,180
205,039
205,039
1,532
1,532
5,270
5,270
(120)
(120)
875
875
197,359
197,359
204,916
204,916
123
123
205,039
205,039
683
683
217,046
217,046
-
-
21,240
21,240
383
383
10,417
10,417
208
208
5
5
249,982
249,982
6,018
6,018
17,095
17,095
197
197
24,915
24,915
48,225
48,225
298,207
298,207
17,320
17,320
2,714
2,714
-
298
298
20,332
20,332
27,893
27,893
21,757
21,757
303
303
-
-
235
235
30,000
30,000
26,936
26,936
79,231
79,231
99,563
99,563
198,644
198,644
1,532
1,532
5,270
5,270
(45)
(45)
(157)
(157)
191,982
191,982
198,582
198,582
62
62
198,644
198,644
P.J. AUSTIN
Director
M.P. MAGEE
Director
The notes on pages 90 to 116 form an integral part of these accounts. The independent auditor’s report is on pages 80 to 85.
Annual Report and Accounts 2021 87
Financial Statements
Consolidated Statement of Changes in Equity
for the year ended 30 September 2021
Note
Share Revaluation
reserve
capital
ESOP
reserve
*Other Retained
earnings
reserves
Total
At 1 October 2020 - restated
Total recognised income and expense for the year
Amortisation of employee share option scheme
Movement on hedges (net of tax)
Actuarial gain on defined benefit scheme (net of tax)
Equity dividends
At 30 September 2021
At 1 October 2019 as previously stated
Impact of prior year adjustment
At 1 October 2019 restated
Total recognised income and expense for the year
Funding of employee share option scheme
Amortisation of employee share option scheme
Movement on hedges (net of tax)
Actuarial loss on defined benefit scheme (net of tax)
Equity dividends
8
2
8
£000
1,532
-
-
-
-
-
1,532
1,532
-
1,532
-
-
-
-
-
-
£000
£000
£000
£000
£000
5,270
(120)
875
197,359
204,916
16,155
16,155
-
-
(2,493)
-
-
-
-
-
-
41
-
-
-
-
-
11,842
(5,178)
5,270
(79)
(1,618)
220,178
225,283
5,270
-
5,270
-
-
-
-
-
-
(45)
-
(45)
-
(78)
3
-
-
-
(157)
192,882
199,482
-
(900)
(900)
(157)
191,982
198,582
11,624
11,624
-
-
-
1,032
-
-
(1,330)
(4,917)
41
(2,493)
11,842
(5,178)
(78)
3
1,032
(1,330)
(4,917)
-
-
-
-
-
At 30 September 2020 - restated
1,532
5,270
(120)
875
197,359
204,916
*’Other reserves’ represents the foreign currency hedging reserve.
The notes on pages 90 to 116 form an integral part of these accounts. The independent auditor’s report is on pages 80 to 85.
88
JERSEY ELECTRICITY
Consolidated Statement of Cash Flows
for the year ended 30 September 2021
Cash fl ows from operating activities
Operating profi t
Depreciation and amortisation charges
Share-based reward charges
Gain on revaluation of investment property
Pension operating charge less contributions paid
Profi t on sale of property, plant and equipment
Operating cash fl ows before movement in working capital
Working capital adjustments:
Increase in inventories
(Increase)/decrease in trade and other receivables
Increase in trade and other payables
Net movement in working capital
Interest paid on borrowings
Preference dividends paid
Income taxes paid
Net cash fl ows from operating activities
Net cash fl ows from operating activities
Cash fl ows from investing activities
Purchase of property, plant and equipment
Investment in intangible assets
Deposit interest received
Net proceeds from disposal of fi xed assets
Net cash fl ows used in investing activities
Net cash fl ows used in investing activities
Cash fl ows from fi nancing activities
Equity dividends paid
Dividends paid to non-controlling interest
Purchase of shares for employee benefi t trust
Repayment of lease liabilities
Net cash fl ows used in fi nancing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Eff ect of foreign exchange rate changes
Cash and cash equivalents at the end of the year
2021
£000
20,513
20,513
10,924
10,924
41
41
(6,055)
(6,055)
3,357
3,357
(6)
(6)
28,774
28,774
(881)
(881)
(2,263)
(2,263)
904
904
(2,240)
(2,240)
(1,395)
(1,395)
(9)
(9)
(2,742)
(2,742)
22,388
22,388
(8,513)
(8,513)
(805)
(805)
112
112
6
6
(9,200)
(9,200)
(5,178)
(5,178)
(101)
(101)
-
-
(297)
(297)
(5,576)
(5,576)
7,612
7,612
35,520
35,520
4
4
43,136
43,136
2020
2020
£000
£000
16,207
11,424
3
(515)
1,439
(24)
28,534
(10)
1,433
1,071
2,494
2,494
(1,376)
(9)
(2,714)
26,929
(10,922)
(337)
139
24
(11,096)
(4,917)
(55)
(55)
(78)
(189)
(5,239)
10,594
24,915
11
35,520
IAS 7 ‘ Statement of Cash Flows’ requires the explanation of both cash and non-cash movements in assets and liabilities relating to fi nancing activities. See note 16.
Of the £43.1m cash and cash equivalents at 30 September 2021, £35.0m (2020: £20.0m) is on fi xed term deposits with an average of 79 days remaining (2020: 52 days).
The notes on pages 90 to 116 form an integral part of these accounts. The independent auditor’s report is on pages 80 to 85.
Annual Report and Accounts 2021 89
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 30 September 2021
1 Accounting policies
Basis of preparation
The Group’s accounting policies as applied for the year ended 30 September 2021 are based on all International Financial
Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and which have been adopted by
the EU, including International Accounting Standards (IAS) and interpretations issued by the International Financial Reporting
Interpretations Committee (IFRIC). The principal accounting policies which have been applied consistently are:
Basis of accounting
The consolidated financial statements have been prepared under the historic cost convention as modified by the revaluation of
investment properties and derivative financial instruments.
Basis of consolidation
The Group’s consolidated financial information for the year ended 30 September 2021 comprises the Company and its
subsidiary.
The subsidiary is an entity over which the Company has the power to govern the financial and operating policies, accompanying
a shareholding that confers more than half of the voting rights.
Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity therein.
Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-
controlling interest’s share of changes in equity since the date of the combination.
The consolidated financial information includes the Group’s share of the post-tax results and net assets under IFRS of the
jointly controlled entity using the equity method of accounting. Equity accounting is a method of accounting by which an equity
investment is initially recorded at cost and subsequently adjusted to reflect the investor’s share of the net profit or loss of the
investee. Jointly controlled entities are those entities over which the Group has joint control with one or more other parties and
over which there has to be unanimous consent by all parties to the strategic, financial and operating decisions.
Under Article 105 (11) of the Companies (Jersey) Law 1991 (“the Law”), the Directors of a holding company need not prepare
separate financial statements if consolidated accounts for the Company are prepared, unless required to do so by the members
of the Company by ordinary resolution. The members of the Company had not passed a resolution requiring separate financial
statements and, in the opinion of the Directors, the Company meets the definition of a holding company as set out in the Law.
As permitted by the Law, the Directors have elected not to prepare separate financial statements.
Going Concern
The Group’s business activities, together with the factors likely to affect its future development, performance and position are
set out in the Chairman’s Statement (see pages 2 to 3). The financial position of the Group, its cash flow and its liquidity position
are described in the Financial Review (see pages 51 to 54). In addition, note 22 to the financial statements includes the Group’s
objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial
instruments and hedging activities; and its exposures to risks. The Group has considerable financial resources together with a
large number of customers both corporate and individual. As a consequence, the Directors believe that the Group is well placed
to manage its business risks successfully. The Directors have a reasonable expectation that the Group has adequate resources
to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis
in preparing the financial statements and in making the viability statement on pages 53 to 54.
Foreign currencies
The functional and presentation currency of the Company is Pounds sterling. Transactions in currencies other than sterling are
recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and
liabilities that are denominated in foreign currencies are translated at the rates prevailing on the balance sheet date. Non-
monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date
when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are
not retranslated. Gains and losses arising on translation are included in net profit or loss for the year.
90
JERSEY ELECTRICITY
1 Accounting policies (continued)
Revenue
The Group recognises revenue from the following services:
i) Energy supply
Energy sales revenue is recognised on the basis of energy supplied during the period. Revenue for energy supply is
therefore accounted “over time” and includes an estimated assessment of energy supplied to customers. This is between
the date of the last meter reading and the balance sheet date, using historical consumption patterns.
Service connections revenue is derived from the provision of a connection to an existing mains cable, laying required
infrastructure to the boundary of a customer’s property and connecting to their domestic supply. Management considers
that the combination of these activities comprise a distinct performance obligation to the customer. Service connection
income is recognised at the point in time that the service is complete.
Capital contributions arise where charges are made to a developer when the Group provides a first-time supply for a
property/properties. These charges cover the immediate infrastructure requirements as well as future investment needed
to meet the extra demands which new connections put on existing network infrastructure. Management considers that
the obligation to invest in the network is highly interrelated with the ongoing and future obligation to provide electricity
supply services, particularly to maintain continuous supplies into the future. The investment in the network from the
infrastructure charges enables the Group to continue providing value to the customer through the supply of electricity.
The associated asset arises from the investment in the network and therefore the Group recognises infrastructure income
through revenue on a straight line basis over the life of the associated asset. Deferred infrastructure charges are initially
recorded within deferred income.
ii) Retail
Revenue resulting from the sales of goods within our retail business is recognised on sale to the customer at that point
in time, as this is the point at which the company recognises the transfer of risks and rewards. Retail additionally sells
service contracts to customers where the obligations to the customer are recognised as revenue on a monthly basis for
the duration of the service contract.
iii) Building Services
Revenue within JEBS, our contracting and building services business, is recognised as the service is provided. As such JEBS
recognises the revenue over time as an appropriate amount each month end, driven by the stage of completion for each
contract (usually assessed by reference to costs incurred against budget to date).
iv) Property
Rental income is accrued on a monthly basis by reference to the agreements entered. Where applicable, contingent rental
revenue is also recognised based on historic levels and in accordance with IFRS 16.
v) Other
Other income is recognised as the service is provided or on receipt of payment as appropriate. Other income also
includes indefeasible rights of use (IRU) sales.
Through Jersey Electricity’s interest in submarine cables, the Group has the ability to sell dark fibre to telecom network
operators seeking to extend their own networks through IRU agreements. Income from IRUs where an IRU agreement
does not transfer substantially all the risks and benefits of ownership to the buyer or is deemed not to extend for
substantially all of the assets’ expected useful lives, is recognised on a straight-line basis over the life of the agreement,
even when the payments are not received on such a basis. Where agreements extend for substantially all of the assets’
expected useful lives and transfer substantially all the risks and benefits of ownership to the buyer, the resulting profit/
(loss) is recognised in the consolidated income statement as a gain/(loss) on disposal of fixed assets.
vi) Interest free financing
Both retail customers and those wishing to fuel switch to electric heating can qualify for interest free credit terms.
Within retail, the Group has applied the practical expedient available in IFRS 15 (paragraph 63) and has not made an
adjustment for any impacts of financing since customers will typically pay for the goods within 12 months or less.
Where financing is provided for fuel switching, repayment terms are typically up to five years. As such a deemed interest
charge is calculated on an annual basis and offset against revenue.
Annual Report and Accounts 2021 91
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 30 September 2021
1 Accounting policies (continued)
Revenue (continued)
Income in Jendev arises from both ongoing support contracts as well as implementation contracts and small ad-hoc
development. Across these revenue streams are elements that relate to both point in time and over time delivery of
service to customers. With ongoing support contracts the obligation is to provide user support for the specified business
systems for a time period and the transaction price is an annualised rate invoiced every six or 12 months. The contracts
provide that Jendev be on call should support be required, therefore the performance obligation is the time period
over which this is provided. The revenue is recognised as the obligation is satisfied, each month recognising 1/12th of
the annual rate as we have provided support over that period. With implementation contracts Jendev is deemed to be
creating or enhancing an asset that the customer controls as the asset is being enhanced or created. As such revenue is
recognised over time at an appropriate amount each month end, driven by the stage of completion for each contract. This
can be assessed by completion of milestone obligations or by reference to development costs incurred.
Jersey Deep Freeze is a 51% (2020: 51%) controlled subsidiary. Revenues are derived from two workstreams. Firstly, service
contracts where the obligation is satisfied over time and the customer is invoiced and revenue recognised as such, on a
monthly basis. Secondly, provision of goods (refrigeration equipment) which is invoiced and revenue recognised at a point
in time, upon delivery of the equipment to the customer.
Taxation
The tax expense represents the sum of tax currently payable and deferred tax. The tax currently payable is based on taxable
profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of
income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or
deductible.
Deferred tax is the tax expected to be payable or recoverable on the difference between the carrying amounts of assets and
liabilities in the balance sheet and the corresponding tax bases used in the computation of taxable profits, and is accounted
for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which
deductible temporary differences can be utilised.
Deferred tax is calculated at the tax rates that are expected to apply in the period in which the liability is settled or the asset
is realised, on a non-discounted basis, and is recorded in the income statement, except where it relates to items recorded to
equity via other comprehensive income, in which case the deferred tax is also dealt with in that statement.
Intangible assets
The costs of acquired computer software are capitalised on the basis of the costs incurred to acquire and bring to use the
specific software and are amortised over their useful lives. Costs directly associated with the development of computer software
programmes that will generate economic benefits over a period in excess of one year are capitalised and amortised over their
estimated useful lives. Costs include employee costs relating to software development and an appropriate proportion of directly
attributable overheads. Amortisation is charged on a straight-line basis over its expected useful life which is estimated to be up
to four years.
Property, plant and equipment
In accordance with IAS 16 costs are capitalised where it is probable that future economic benefits associated with the asset
being purchased or constructed will flow to the entity; and the cost of the asset can be measured reliably.
For assets under construction, all costs incurred which are directly attributable to bringing the asset to a point of
commissionable use, including direct materials and direct labour costs are capitalised once an executive decision has been
taken to proceed with the construction of the asset.
Property, plant and equipment (“PPE”) excludes investment property and is stated at cost less accumulated depreciation and
impairment losses, if any. Assets are depreciated on the straight-line method to their expected residual values over their
estimated useful lives from the year following acquisition. Property, plant and equipment include capitalised employee, interest
and other costs that are directly attributable to construction of these assets. Property, plant and equipment under the course of
construction is not depreciated and is carried at cost less impairment.
Owner-occupied property is classified within PPE.
92
JERSEY ELECTRICITY
1 Accounting policies (continued)
Property, plant and equipment (continued)
Depreciation is charged as follows:
Buildings
Interlinks
up to 50 years
up to 30 years
Plant, mains cables and services up to 60 years
Fixtures and fittings
Computer equipment
Vehicles
up to 15 years
up to 4 years
up to 10 years
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds
and the carrying amount of the asset and is recognised in the consolidated income statement.
Customer contributions in respect of additions to plant are treated as deferred income within Trade and other payables which
is classified as non-current liabilities and released to the income statement over the estimated operational lives of the related
assets.
Right of use assets
Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct
costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Where a
modification to a lease agreement decreases the scope of the lease, the carrying amount of the right of use asset is adjusted
and a gain or loss is recognised in proportion to the decrease in scope of the lease. All other modifications to lease agreements
are accounted for as a reassessment of the lease liability with a corresponding adjustment to the right of use asset.
Impairment of tangible and intangible assets
At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to
estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating
unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, assets are also allocated
to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a
reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its recoverable amount.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the
revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years.
A reversal of an impairment loss is recognised immediately in the consolidated income statement, unless the relevant asset is
carried at a revalued amount, in which case the reversal of the impairment loss is rated as a revaluation increase.
Investment properties
Investment properties are stated at fair value at the balance sheet date. Gains or losses arising from changes in the fair value of
investment properties are included in the consolidated income statement for the period in which they arise. The Group’s policy
on freehold properties is to classify it as an investment property both when the property is held for capital appreciation or rental
purposes and when it is fully occupied by external tenants.
Investment in joint arrangement
The results, assets and liabilities of the joint arrangement are incorporated using the equity method. Investment in the joint
arrangement is therefore carried in the consolidated balance sheet at cost as adjusted by changes in the Group’s share of net
assets, less any impairment.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable,
direct labour and overheads that have been incurred in bringing the inventories to their location and condition at year end.
Cost is calculated using the weighted average method with the exception of fuel oil which is calculated using the first-in first-out
method. Net realisable value represents the estimated selling price.
Annual Report and Accounts 2021 93
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 30 September 2021
1 Accounting policies (continued)
Financial instruments
Cash and cash equivalents
Cash and cash equivalents comprise cash and short-term deposits with an original maturity of three months or less.
Short-term investments
Short-term investments comprise cash deposits which have a maturity greater than three months at the time of inception.
Trade and other receivables
Trade receivables are initially recognised at invoice value and do not carry any interest and are reduced by appropriate
allowances for estimated irrecoverable amounts.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all trade receivables. The Group’s assessment for calculating expected credit losses is made by reference to its
historical collection experience, including comparisons of the relative age of the individual balance and the consideration of
the actual write-off history. The provisioning rates applied in the calculation are reviewed on an annual basis to reflect the
latest historical collection performance data and management’s expectation of future performance and industry trends.
Furthermore, where the Group has assessed a known risk of recoverability relating to known customers these balances are
provided for in full.
Trade and other payables
Trade and other payables are initially recognised at invoice value and are not interest bearing and are subsequently stated at
their amortised cost. Amortised cost is considered by the Directors to be equivalent to invoiced value.
Borrowings
Borrowings are measured at amortised cost using the effective interest method. Interest expense is recognised by applying
the effective interest rate.
Derivative financial instruments
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently re-
measured to their fair value at each balance sheet date. Changes in the fair value of derivative financial instruments which
are designated as highly effective hedges of future cash flows are recognised directly in other comprehensive income and
any ineffective portion is recognised immediately in the consolidated income statement. When hedges mature that do not
result in the recognition of an asset or a liability, amounts deferred in other comprehensive income are recognised in the
consolidated income statement in the same period in which the hedged item affects net profit or loss.
Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the
consolidated income statement as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer
qualifies for hedge accounting. Until that time, any cumulative gain or loss on the hedging instrument recognised in other
comprehensive income is kept in equity until the forecasted transaction occurs. If a hedged transaction is no longer expected
to occur, the net cumulative gain or loss that has been recognised in other comprehensive income is transferred to the
consolidated income statement.
Following the adoption of IFRS 9 and as permitted by this standard, the Group has elected to continue to apply the hedge
accounting requirements of IAS 39. This policy choice will be periodically reviewed to consider any changes in our risk
management activities.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets
that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those
assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the
temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing
costs eligible for capitalisation. All other borrowing costs are recognised in the consolidated income statement in the period in
which they occurred.
Dividends
Dividends are recorded in the Group’s financial statements in the period in which they are approved by the Company’s
shareholders. Interim dividends are recorded in the period in which they are paid.
Share capital
Ordinary shares are classified as equity. Mandatorily redeemable preference shares are classified as liabilities. Incremental
costs directly attributable to the issue of new shares or options are shown as a deduction, net of tax, from the proceeds.
94
JERSEY ELECTRICITY
1 Accounting policies (continued)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and where
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Provisions are reviewed at each balance sheet date and are adjusted to
reflect the current best estimate.
Retirement benefits
The Company provides pensions through both a defined contributions scheme and a defined benefit scheme. In the latter the
cost of providing benefits is determined using the projected unit credit method, with full actuarial valuations being carried out
at a minimum every three years. Actuarial gains and losses are recognised in full, directly in retained earnings in the period in
which they occur and are shown in the statement of comprehensive income. The net figure derived from the current service
cost element of the pension charge, the expected return on pension scheme assets and interest on pension scheme liabilities,
including past service cost, is deducted in arriving at operating profit. Retirement benefits recorded in the balance sheet
represent the net financial position of the Group’s defined benefit pension scheme.
Share-based payments
Equity-settled share-based payments to employees and others providing similar services are measured at fair value of the
equity instruments at the grant date. The fair value excludes the effect of non-market-based vesting conditions. Details
regarding the determination of the fair value of equity-settled share-based transactions are not separately disclosed due to
their immaterial value.
The fair value determined at the grant date of the equity-settled share-based payments is expensed over the vesting period,
based on the Group’s estimate of equity instruments that will eventually vest. At each balance sheet date, the Group revises its
estimate of the number of equity instruments expected to vest as a result of the effect of non market-based vesting conditions.
The impact of the revision of the original estimates, if any, is recognised in the income statement such that the cumulative
expense reflects the revised estimate, with a corresponding adjustment to equity reserves.
Accounting developments
In preparing these Consolidated Financial Statements, the Group has applied all relevant IFRS, IAS and Interpretations issued
by the IFRIC which have been adopted by the EU as of the date of approval of these Consolidated Financial Statements.
The following new accounting standards, amendments to existing accounting standards and/or interpretations of existing
accounting standards are mandatory for the current period and have been adopted by the Group. All other new standards,
amendments to existing standards and new interpretations that are mandatory for the current year have no bearing on the
operating activities and disclosures of the Group and consequently have not been listed. The Group has not adopted any new
standards or interpretations that are not mandatory.
New standards, amendments and interpretations effective or adopted by the Group
The accounting policies applied are consistent with those of the prior year. From 1 January 2020 (1 October 2020 for the Group),
amendments to IFRS 3: Business Combinations; IFRS 7, IFRS 9 and IAS 39; Interest Rate Benchmark Reform; amendments to IAS
1 and IAS 8; and the conceptual framework for financial reporting became effective. None have had a material impact on the
Group. From 1 June 2020 an amendment to IFRS 16 for coronavirus related rent concessions became effective. The Group has
not received or granted any rent concessions and so has not early adopted the amendment as it would have no impact on the
presentation of these Financial Statements.
New standards, amendments and interpretations issued, but not yet adopted by the Group
IFRS 17 ‘Insurance Contracts’ is effective from 1 January 2023 (1 October 2023 to the Group) and is subject to endorsement.
IFRS 17 ‘Insurance contracts’ was originally issued in May 2017, then reissued in June 2020, and replaces IFRS 4 ‘Insurance
Contracts’ and sets out the requirements that a company should apply in reporting information about insurance contracts it
issues and reinsurance contracts it holds. It is therefore not expected that adoption of this standard will have any impact on the
Group’s consolidated financial statements.
In addition to these issued standards, there are a number of other interpretations, amendments and annual improvement
project recommendations that have been issued but not yet adopted by the Group because application is not yet mandatory.
2 Critical Accounting Judgements and key sources of estimation uncertainty
In the application of the Group’s accounting policies, which are described in note 1, the Directors are required to make
judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent
from other sources. The estimates and associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are monitored on an ongoing basis. Changes to accounting estimates are
recognised in the period in which an estimate is revised if the modification affects only that period (or also in future periods
if applicable).
Annual Report and Accounts 2021 95
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 30 September 2021
2 Critical Accounting Judgements and key sources of estimation uncertainty (continued)
Critical accounting judgements
The following are the critical judgements, apart from those involving estimations (which are dealt with separately below), that
the directors have made in the process of applying the Group’s accounting policies and that have the most signifi cant eff ect on
the amounts recognised in fi nancial statements.
i Hedge accounting
The Group utilises currency derivatives to hedge a proportion of its future purchases of electricity from France which
currently extend to the next three calendar years as well as for any foreign currency denominated capital contracts.
Judgement is applied in establishing the quantum of these future foreign exchange commitments as the volume and price
of imported electricity vary annually. All such currency derivatives are fair valued, based on market values of equivalent
instruments at the balance sheet date.
ii Decommissioning
A judgement has been made that the Company does not meet the recognition criteria (set out in IAS 37 Provisions) as it
does not have any set obligation to decommission any of our material assets but a risk exists that costs may be incurred in
the future. The assets concerned are our power station at La Collette, which is leasehold with a current end date of 2056,
and our subsea interconnectors to France and Guernsey. None of the assets have a defi nitive planning or legal obligation to
decommission at the end of life but obligations could develop over time, for example, for environmental reasons. There are
varying external opinions as to whether subsea cables should be left in place, or removed, at the end of their useful life as
over time the interconnector asset becomes part of the marine infrastructure.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation and uncertainty at the reporting date that may
have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi nancial
year are disclosed below.
Retirement benefi t obligations
The Group provides pensions through a defi ned benefi ts scheme for a number of its employees which is accounted for in
accordance with IAS 19 ‘Employee Benefi ts’. The benefi t obligation is discounted at a rate set by reference to market yields at
the end of the reporting period on high quality corporate bonds. Signifi cant judgement is required when setting the criteria
for bonds to be included in the population from which the yield curve is derived. The most signifi cant criteria considered for
the selection of bonds include the issue size of the corporate bonds, quality of the bonds and the identifi cation of outliers
which are excluded. The discount rate used in 2021 was 2.1% and in 2020 was 1.6%.
Prior year adjustment
During 2020 we migrated to a new Smart Pay As You Go metering solution for around 4,000 of our electricity customers who
choose this payment method as a budgeting tool. The legacy system, which had been installed in the 1990’s, was scrapped
and the remaining credit balances and debts that existed on each meter transferred across to the new system.
Following a review of the remaining £0.9m balance in our receivable’s ledger we ascertained that there had been a
systematic over statement of income from this payment method over the period since 1998, when a new ERP fi nancial
system was adopted. The primary drivers being a combination of both the accumulation of £5 free credit provided as a
customer service benefi t to all new charge keys and a timing delay arising on each occasion tariff s have risen. The sums were
relatively immaterial on an annual basis.
The Smart Pay As You Go metering solution benefi ts from more accurate data, including the elimination of time lag where
tariff s move and any upfront credit provided to customers is now reclaimed over subsequent top-ups. At 30th September
2021 a deferred income balance of £0.5m is included and has been assessed as being reasonable.
In accordance with IAS 8, it has proven impractical to accurately allocate adjustments to all the individual years between
1998-2019. Therefore, £0.9m has been written off and treated as a prior year adjustment against reserves and trade
receivables as seen in both the Consolidated Balance Sheet and the Consolidated Statement of Changes in Equity.
Each of the aff ected fi nancial statement line items for the prior periods have been restated as follows:
30 Sept
2020 Decrease
2020 Decrease
£000
£000
£000
£000
30 Sept
2020
2020
£000
£000
Restated
Restated
1 Oct
1 Oct
2019 Decrease
2019 Decrease
£000
£000
£000
£000
1 Oct
1 Oct
2019
2019
£000
£000
Restated
Restated
Trade and other receivables - current assets
16,645
16,645
(900)
(900)
15,745
15,745
17,995
17,995
(900)
(900)
17,095
17,095
Retained earnings
198,259
198,259
(900)
(900)
197,359
197,359
192,882
192,882
(900)
(900)
191,982
191,982
96
JERSEY ELECTRICITY
3 Business segments
The business segments below are those reported to the Group’s Chief Executive for the purposes of resource allocation and
performance assessment:
2021
2021
External
External
Internal
Internal
£000
£000
£000
£000
2021
Total
Total
£000
£000
2020
2020
2020
2020
External
External
Internal
Internal
£000
£000
£000
£000
2020
2020
Total
Total
£000
£000
Revenue
Energy
Energy
Energy
Building Services
Retail
Property
Other*
Intergroup elimination
Revenue
Operating profi t
Energy
Energy
Building Services
Building Services
Retail
Retail
Property
Property
Other
Other
Revaluation of investment properties
Operating profi t
Finance income
Finance income
Finance costs
Finance costs
Profi t from operations before taxation
Taxation
Taxation
Profi t from operations after taxation
Attributable to:
Owners of the Company
Owners of the Company
Owners of the Company
Non-controlling interests
89,780
89,780
89,780
3,399
3,399
19,808
19,808
2,304
2,304
3,317
3,317
100
100
100
645
645
68
68
645
645
945
945
89,880
89,880
89,880
4,044
4,044
19,876
19,876
2,949
2,949
4,262
4,262
85,140
85,140
3,767
3,767
17,825
17,825
2,266
2,266
2,749
2,749
122
122
1,027
1,027
60
60
645
645
891
891
118,608
118,608
2,403
2,403
121,011
121,011
111,747
111,747
2,745
2,745
(2,403)
118,608
10,693
217
1,533
1,393
622
14,458
6,055
20,513
112
(1,540)
19,085
(2,794)
16,291
16,155
16,155
16,155
136
136
16,291
16,291
85,262
85,262
4,794
4,794
17,885
17,885
2,911
2,911
3,640
3,640
114,492
114,492
(2,745)
(2,745)
111,747
111,747
12,257
12,257
216
216
1,176
1,176
1,270
1,270
773
773
15,692
15,692
515
515
16,207
16,207
139
139
(1,516)
(1,516)
14,830
14,830
(3,090)
(3,090)
11,740
11,740
11,624
11,624
116
116
11,740
11,740
*Other segment includes Jersey Energy, Jendev (divisions) and Jersey Deep Freeze Limited, the Group’s sole subsidiary.
Materially, all the Group’s operations are conducted within the Channel Islands. All transfers between divisions are on an
arms-length basis.
Revaluation of investment properties is shown separately from Property operating profi t as income.
Revenues disclosed by the business segments above are recognised both on a point in time and over time basis. The treatment
of revenue recognition in accordance with IFRS 15 is detailed for each of these business segments in note 1 to these fi nancial
statements.
Annual Report and Accounts 2021 97
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 30 September 2021
4 Operating expenses
Distribution costs
Administration expenses
2021
£000
12,363
12,363
17,628
17,628
29,991
29,991
2020
2020
£000
£000
12,343
14,017
26,360
5 Directors and employees
Detailed information in respect of Directors’ shareholdings and emoluments, pensions and benefi ts is given in the
Remuneration Committee Report on pages 75 to 78. The number of persons (full time equivalents) employed by the Group
(including non-Executive Directors) at 30 September was as follows:
Energy
Energy
Energy
Other businesses
Trainees
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Social security costs
Pension (note 17)*
Capitalised manpower costs**
2021
2020
2020
Number
Number
Number
238
238
238
88
88
21
21
347
347
2021
£000
18,592
18,592
1,003
1,003
4,967
4,967
24,562
24,562
(2,083)
(2,083)
22,479
22,479
199
97
9
305
2020
2020
£000
£000
17,441
941
3,163
21,545
(1,868)
19,677
* The pension costs above relate to the defi ned benefi t pension scheme. The contributions recognised as an expense relating to
the defi ned contribution scheme are included within wages and salaries and amount to £503,000 (2020: £397,000).
** Capitalised manpower costs are included in note 11 under categories ‘Mains cables and services’, ‘Fixtures, fi ttings, vehicles’
and ‘Interlinks’, etc.
98
JERSEY ELECTRICITY
6 Group operating profi t
Operating profi t is after charging/(crediting):
Fees payable to Group auditor
Auditor’s remuneration for audit services
Auditor’s remuneration for non-audit services
Other operating charges
Depreciation of property, plant, equipment and right-of-use assets (note 11)
Amortisation of intangible assets
Maintenance and repairs
Marketing costs
Movement in expected credit losses
Administration costs
7 Taxation
Current tax:
Jersey Income Tax - ordinary activities
Total current tax
Deferred tax:
Current year
Total tax on profi t on ordinary activities
2021
£000
249
-
10,573
351
2,350
726
(110)
1,908
2021
£000
3,020
3,020
2020
£000
242
-
10,833
541
1,768
618
381
1,383
2020
£000
2,742
2,742
(226)
348
2,794
3,090
The diff erences between the total tax charge shown above and the amount calculated by applying the standard rate of Jersey
Income Tax to the profi t before tax is as follows:
Profi t from ordinary activities before tax
Tax on profi t on ordinary activities at standard income tax rate of 20% (2020: 20%)
Eff ects of:
Expenses not deductible for tax purposes
Income not taxable for tax purposes
Non-qualifying depreciation
Group current tax charge for year
2021
£000
19,085
3,817
17
(1,328)
288
2,794
2020
£000
14,830
2,966
5
(214)
333
3,090
Annual Report and Accounts 2021 99
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 30 September 2021
7 Taxation (continued)
Deferred Tax
The following outlines the major deferred tax assets/liabilities recognised by the Group and Company:
Group and Company
Accelerated capital allowances
Derivative fi nancial instruments
Pensions
Provisions for deferred tax
Deferred tax movements in the year
Group and Company
At 1 October
Charged to profi t and loss account
Charged to statement of comprehensive income
At 30 September
2021
£000
25,973
25,973
(404)
(404)
3,752
3,752
29,321
29,321
2021
£000
27,209
27,209
(226)
(226)
2,338
2,338
29,321
29,321
2020
2020
£000
£000
25,527
25,527
219
219
1,463
1,463
27,209
27,209
2020
2020
£000
£000
26,936
26,936
348
348
(75)
(75)
27,209
27,209
The Company is taxed solely in Jersey as it has no legal presence in any other jurisdiction. The applicable rate of income tax for
utility companies in Jersey is 20%, whilst the applicable rate for companies in general, such as Jersey Deep Freeze Limited is 0%.
There are no current indications, political or otherwise, that these rates are expected to change in the foreseeable future. The
eff ective tax rate on pre-tax profi ts is 21% (2020: 21%) due to the manner in which capital allowances are applied in place of
depreciation expenses which are included in the pre-tax profi t fi gure. As the tax liability rests with the Government of Jersey, the
right to off set assets and liabilities allows the balance sheet to show the net deferred tax liability position.
There is no tax impact on the Group arising from the proposed dividend shown in note 8.
8 Dividends paid and proposed
Equity:
Ordinary and ‘A’ Ordinary:
Dividend paid
fi nal for previous year
interim for current year
Per Share
In Total
2021
2021
pence
2020
2020
pence
pence
9.70
9.70
7.20
7.20
16.90
16.90
9.25
6.80
16.05
2021
£000
2,972
2,972
2,206
2,206
5,178
5,178
2020
2020
£000
£000
2,834
2,083
4,917
Dividend proposed fi nal for current year
10.20
10.20
9.70
3,125
3,125
2,972
The proposed dividend is subject to approval at the forthcoming AGM and has not been included as liabilities in these fi nancial
statements. These dividends are shown net of 20% tax.
Dividends paid out to non-controlling interests in relation to Jersey Deep Freeze Limited are disclosed in note 19.
100 JERSEY ELECTRICITY
9 Earnings per Ordinary share
Earnings per Ordinary and ‘A’ Ordinary share (basic and diluted) of 52.73p (2020: 37.94p) are calculated on the Group profit, after
taxation, of £16,155,000 (2020: £11,624,000), and on the 30,640,000 (2019: 30,640,000) Ordinary and ‘A’ Ordinary shares in issue
during the financial year and at 30 September 2021. There are no share options in issue nor any changes to the employee share
option scheme and therefore there is no difference between basic and diluted earnings per share.
10 Intangible assets
Cost as at 1 October 2020
Additions
Disposals
At 30 September 2021
Amortisation
At 1 October 2020
Charge for the year
Disposals
At 30 September 2021
Net book value
At 30 September 2021
Cost as at 1 October 2019
Additions
Disposals
At 30 September 2020
Amortisation
At 1 October 2019
Charge for the year
Disposals
At 30 September 2020
Net book value
At 30 September 2020
Computer Software
£000
1,818
805
(202)
2,421
1,339
351
(202)
1,488
933
Computer Software
£000
1,656
337
(175)
1,818
973
541
(175)
1,339
479
The above amortisation charges are included within operating expenses in the consolidated income statement.
The gross carrying amount of intangible assets at net book value of zero at 30 September 2021 was £80k. The average remaining
useful life of intangible assets is 3 years.
Annual Report and Accounts 2021 101
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 30 September 2021
11 Property, plant, equipment, right-of-use assets and investment properties
Mains
Fixtures,
Freehold land Leasehold
cables and
fittings,
Right-of-use Investment
and buildings buildings
£000
£000
Plant
£000
services vehicles etc.
Interlinks
£000
£000
£000
Total
£000
assets properties*
£000
£000
Cost or valuation
At 1 October 2020
Expenditure/lease additions
Revaluation
Disposals
At 30 September 2021
Depreciation
At 1 October 2020
Charge for the year
Disposals
At 30 September 2021
Net book value at
30 September 2021
36,467
699
-
-
37,166
11,188
721
-
11,909
16,990 112,570
3,219
-
-
97,539
4,100
-
-
17,373 115,789 101,639
383
-
-
22,918
680
-
(611)
22,987
98,182 384,666
9,081
-
(611)
98,182 393,136
-
-
-
3,002
324
-
-
3,326
21,755
-
6,055
-
27,810
7,650
366
-
8,016
68,885
2,760
-
71,645
34,302
1,427
-
35,729
11,355
2,076
(607)
12,824
33,350 166,730
10,463
(607)
36,463 176,586
3,113
-
103
110
-
213
-
-
-
-
25,257
9,357
44,144
65,910
10,163
61,719 216,550
3,113
27,810
Mains
Fixtures,
Freehold land Leasehold
cables and
fittings,
Right-of-use Investment
and buildings buildings
£000
£000
Plant
£000
services vehicles etc.
Interlinks
£000
£000
£000
Total
£000
assets properties*
£000
£000
Cost or valuation
At 1 October 2019
Recognition on adoption of IFRS 16
Expenditure/lease additions
Modification/revaluation
Disposals
At 30 September 2020
34,461
-
2,006
-
-
36,467
16,990 108,577
-
4,273
-
(280)
16,990 112,570
-
-
-
-
94,189
-
3,350
-
-
97,539
23,096
-
1,873
-
(2,051)
22,918
98,007 375,320
-
11,677
-
(2,331)
98,182 384,666
-
175
-
-
10,092
1,096
-
11,188
7,283
367
-
7,650
66,353
2,812
(280)
68,885
32,931
1,371
-
34,302
11,403
1,996
(2,044)
11,355
30,212 158,274
10,780
(2,324)
33,350 166,730
3,138
-
25,279
9,340
43,685
63,237
11,563
64,832 217,936
2,899
21,755
-
2,901
25
76
-
3,002
-
103
-
103
21,240
-
-
515
-
21,755
-
-
-
-
Depreciation
At 1 October 2019
Charge for the year
Disposals
At 30 September 2020
Net book value at
30 September 2020
102
JERSEY ELECTRICITY
11 Property, plant, equipment, right-of-use assets and investment properties (continued)
Investment properties
The B&Q lease is a fully-repairing lease with a 48 year term from May 2000 and a tenant-only break option, which in March
2021 deferred to May 2038. The Medical Centre lease is an internal repairing lease with a 30 year term from May 2005 and two
remaining break options at 20 and 25 year anniversaries.
Commercial properties have been valued on the basis of a yield between 5.95% and 9.00% before deductions for acquisition costs.
The Directors consider the assumptions and sensitivities in those assumptions would unlikely result in a material difference in
valuation. If residential properties were valued 5% below or above the level assumed this would amount to a differential of £0.6m
whilst the same variance for commercial properties would result in a movement in valuation of around £0.8m. The residential
properties comprise 29 units which are let out on licences or leases with terms no greater than one year. The minimum lease
payments receivable are detailed in note 21.
a. No depreciation is charged on freehold land. Depreciation is included in operating costs in the consolidated income statement.
b. The investment properties were valued as at 30 September 2021 by independent professionally qualified valuers who hold a
recognised relevant professional qualification and are based in Jersey so have knowledge of our location. At each financial year-
end the finance department verifies major inputs to the independent valuation report, assesses property valuation movements
when compared to the prior year valuation report and holds discussions with the independent valuer. Changes in Level 2 and
3 fair values are analysed at each reporting year end and movements are explained. In accordance with IAS40 investment
properties are not depreciated.
The rental income arising from the properties during the year was £1,449k (2020: £1,440k) with maintenance and repair cost
of £161k (2020: £85k). Under the terms of the lease arrangements with residential tenants, the Company is obliged to keep the
rented premises in a good state of condition and repair. The Company is obliged to keep the Medical Centre wind and water
tight and structurally sound, whilst no obligations exist to the Company with regards to the B&Q lease which is fully repairing.
c. The Group figures are tabled together with fixtures, fittings and vehicles for our subsidiary of £51k (2020: £48k) at cost and a net
book value of £12k (2020: £8k).
d. The gross carrying amount of tangible assets still in use at net book value of zero at 30 September 2021 was £60.8m (2020:
£60.0m).
e. The Group leases land and buildings as part of its Energy business, classified as right of use assets. For the year ended 30
September 2021 this includes two roof leases where third party roof areas have been used to provide solar generation. In
addition to the depreciation expense relating to right of use assets of £110k (2020: £103k), the finance costs included in the
consolidated income statement arising from the lease liability was £136k (2020: £131k). The maturity analysis of lease liabilities
is presented in note 16.
Annual Report and Accounts 2021 103
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 30 September 2021
12 Other investments
Joint arrangement
2021
£000
5
5
2020
2020
£000
£000
5
5
Principal group investments
The Company has investments in the following subsidiary undertaking and joint arrangement which principally aff ected the
profi ts or net assets of the Group.
Country of
incorporation or
principal business
address
Joint arrangement:
Channel Islands Electricity Grid Limited
Jersey
Principal
activity
Shareholding
%
Holding
Financial
Year End
Association with
Guernsey Electricity
Limited
5,000 Ordinary
50
30 November
Subsidiary undertaking:
Jersey Deep Freeze Limited
Jersey
Sale and
51 Ordinary
51 30 September
maintenance
of refrigeration and
catering equipment
Channel Islands Electricity Grid Limited (CIEG)
The joint arrangement between the Company and Guernsey Electricity Limited for the installation of a second interconnector
system between France, Jersey and Guernsey required a control point through which the interconnector project manager
could communicate and also, to be the customer which Électricité de France (EDF) would invoice for their energy sales. CIEG,
a company jointly owned and managed on a 50/50 basis by the Company and Guernsey Electricity Limited, was established in
July 1998 to deal with these aspects and also to manage the way in which the second interconnector would be operated. In May
2013, Jersey Electricity and Guernsey Electricity signed an agreement to share the cost and capacity of the Normandie 3 project.
It also provided for cost and capacity sharing of the Normandie 1 project as a replacement of the original EDF1 interconnector
between Jersey and France that failed in June 2012. The Company’s interest in CIEG is accounted for as a joint arrangement
under IFRS 11 ‘Joint arrangements’ and included in these fi nancial statements. CIEG has a reporting period end of 30 November
based on the Company inception date. There was no activity during the current or prior years and CIEG continues to have no
material assets.
Jersey Deep Freeze Limited
The Company owns 51% (2020: 51%) of the issued ordinary share capital of Jersey Deep Freeze Limited, a Jersey company whose
principal business is the sale and maintenance of refrigeration equipment to commercial businesses.
The results are consolidated into these Group fi nancial statements, as the Group is considered to exert control under IFRS 10.
Jersey Deep Freeze Limited has a reporting period end of 30 September.
104 JERSEY ELECTRICITY
13 Inventories
The amounts attributed to the diff erent categories are as follows:
Fuel oil
Commercial stocks and work in progress
Generation, distribution spares and sundry
2021
£000
2,019
2,019
3,348
3,348
1,542
1,542
6,909
6,909
2020
2020
£000
2,206
2,206
2,854
2,854
968
968
6,028
6,028
During the year £15.6m (2020: £14.1m) was recognised directly in cost of sales in respect of inventories sold or used in
operations or production.
14 Trade and other receivables
Amounts receivable within one year:
Trade receivables (includes unbilled units)
Prepayments and other receivables
Amounts receivable after more than one year:
Secured loan accounts
*see note 2.
2021
2021
£000
£000
2020
2020
£000
£000
Restated*
Restated*
15,850
15,850
2,150
2,150
18,000
18,000
14,125
14,125
1,620
1,620
15,745
15,745
308
300
Unbilled revenues included within trade and other receivables in the balance sheet relating to such customers at 30 September
2021 amounted to £5.6m (2020: £5.6m).
The secured loans include a loan to a Director and to a shareholder in the subsidiary Jersey Deep Freeze Limited. See the
Remuneration Committee Report on page 78 in the Report of the Directors for disclosure of the Directors’ loan.
The fair value of trade and other receivables is considered by the Directors to be equivalent to its carrying value.
15 Trade and other payables
Amounts falling due within one year:
Trade payables
Other payables including taxation and social security
Accruals
Deferred income
Amounts falling due after more than one year:
Accruals
Deferred income
2021
£000
1,583
1,583
8,058
8,058
8,218
8,218
514
514
2020
2020
£000
£000
1,948
8,458
7,340
447
18,373
18,373
18,193
144
144
23,862
23,862
24,006
24,006
183
22,531
22,714
The fair value of trade and other payables is considered by the Directors to be equivalent to its carrying value.
Annual Report and Accounts 2021 105
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 30 September 2021
16 Borrowings
The long-term funding via a private placement is in place with Pricoa Capital Group (an affi liate of Prudential Financial, Inc) and
£30m of fi nance drawn on 17 July 2014. This consists of:
a £15m for 20 years at a fi xed rate coupon of 4.41%
b £15m for 25 years at a fi xed rate coupon of 4.52%
This facility includes externally imposed capital requirements. The fi nancial covenants require a net debt to regulated asset
value ratio to be calculated bi-annually not greater than 50% and an EBITDA to borrowings cost ratio not less than 4%, as
defi ned in the loan agreement. The Group continues to meet these covenants.
Unsecured borrowing at amortised cost
Loan obtained from private placement
2021
£000
2020
2020
£000
£000
30,000
30,000
30,000
In addition the above borrowings are supplemented by an unsecured fi ve year £10m revolving credit facility (RCF) from
the Royal Bank of Scotland International Limited (RBSI) which provides fl exibility as the timing of further planned capital
expenditure is variable. This was renewed for a further fi ve year period in July 2019.
This facility bears the same externally imposed capital requirements as detailed above. A one year £2m overdraft facility also
exists with RBSI. Neither RBSI Facility was drawn at 30 September 2021.
The fair value of the loan obtained from private placement at 30 September 2021 is considered to be £35.0m (2020: £38.3m).
Lease liabilities
At 1 October
Lease liability recognised on adoption of IFRS 16
Additions during the year
Unwind of discount
Repayment in the year
As at 30 September
Right of use assets recognised under lease arrangements are detailed within note 11.
The maturity of future lease liabilities are as follows:
Payable within one year
After one year but within fi ve years
After fi ve years
Less: future fi nance charge
Present value of lease obligations
106 JERSEY ELECTRICITY
2021
£000
2,944
2,944
324
324
136
136
(297)
(297)
3,107
3,107
2021
£000
237
237
948
948
8,335
8,335
9,520
9,520
(6,413)
(6,413)
3,107
3,107
2020
2020
£000
£000
2,901
2,901
363
363
(131)
(131)
(189)
(189)
2,944
2,944
2020
2020
£000
£000
195
195
763
763
6,160
6,160
7,118
7,118
(4,174)
(4,174)
2,944
2,944
17 Pensions
The Company sponsors a funded defined benefit pension plan for qualifying Jersey Electricity employees. The plan is
administered by a separate board of Trustees which is legally separate from the Company. The Trustees are composed of
representatives of both the employer and employees, plus an independent trustee. The Trustees are required by law to act in
the interest of all relevant beneficiaries and are responsible for the investment policy with regard to the assets plus the day-to-
day administration of the benefits.
Under the plan, employees are entitled to annual pensions on retirement at age 65 of one-sixtieth or one-eightieth (depending
on category of membership) of final pensionable salary for each year of service. Pensionable salary is defined as the best
successive 12 months’ salary in the past three years. Benefits are also payable on death and following other events such as
withdrawing from active service.
No other post-retirement benefits are provided by the Scheme to these employees.
Profile of the Scheme
The defined benefit obligation includes benefits for current employees, former employees and current pensioners.
Broadly, about 49% of the liabilities are attributable to current employees, 10% to former employees and 41% to current
pensioners.
The Scheme duration is an indicator of the weighted-average time until benefit payments are made. For the Scheme as a whole,
the duration is around 17 years reflecting the approximate split of the defined benefit obligation.
Funding requirements
The last funding valuation of the Scheme was carried out by a qualified actuary as at 31 December 2018 and showed a
surplus of £3.7m. In Jersey there are no legal or regulatory requirements governing pension schemes and therefore no
imposed minimum funding requirement. The Company pays contributions of 20.6% (26.6% for non-contributory members) of
pensionable salaries in respect of current accrual with contributory members paying a further 6% of pensionable salaries.
The effective date of the next funding valuation will be no later than 31 December 2021.
Risks associated with the Scheme
The Scheme exposes the Company to a number of risks, the most significant of which are:
Asset volatility
The liabilities are calculated using a discount rate set with reference to corporate bond yields; if assets underperform this
yield, this will create a deficit. The Scheme holds a significant proportion of growth assets (equities) which, though expected
to outperform corporate bonds in the long-term, create volatility and risk in the short-term. The allocation to growth assets is
monitored to ensure it remains appropriate given the Scheme’s long term objectives.
Changes in bond yields
A decrease in corporate bond yields will increase the value placed on the Scheme’s liabilities for accounting purposes, although
this will be partially offset by an increase in the value of the Scheme’s bond holdings.
Inflation risk
A proportion of the Scheme’s benefit obligations are linked to inflation, and higher inflation will lead to higher liabilities. Most
of the assets are either unaffected by or only loosely correlated with inflation, meaning that an increase in inflation will also
increase the deficit.
Life expectancy
The majority of the Scheme’s obligations are to provide benefits for the life of the member, so increases in life expectancy will
result in an increase in the liabilities.
Risk management
The Company and Trustees have agreed a long-term strategy for reducing investment risk as and when appropriate. This
includes an asset-liability matching policy which aims to reduce the volatility of the funding level of the Scheme by investing in
assets that perform in line with the liabilities of the Scheme.
The Trustees insure certain benefits which are payable on death before retirement.
Reporting at 30 September 2021
The results of the latest funding valuation at 31 December 2018 have been adjusted to the balance sheet date taking account
of experience over the period since 31 December 2018, changes in the market conditions, and differences in the financial and
demographic assumptions. The present value of the defined benefit obligation, and the related current service cost, were
measured using the Projected Unit Credit Method.
Annual Report and Accounts 2021 107
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 30 September 2021
17 Pensions (continued)
The principal assumptions used by the independent qualifi ed actuaries to calculate the liabilities under IAS 19 are set out below:
Main fi nancial assumptions:
Discount rate for scheme liabilities
Infl ation
Rate of general increase in salaries
- short term (year 1)
- long term (year 2 onwards)
Pension increases in payment
- short term (year 1)
- long term (year 2 onwards)
Pension increases in payment for pensions purchased with AVCs
2021
% pa
2.1
2.1
3.4
3.4
4.0
4.0
4.4
4.4
3.0*
3.0*
-
-
3.4
3.4
2020
% pa
% pa
1.6
2.9
3.0
3.9
-
-
2.9
*An ex-gratia pension increase of 3.0% has been awarded to pensioners with pensions in payment. The impact of this has been
recognised as a past service cost in the year ended 30 September 2021.
The fi nancial assumptions refl ect the nature and term of the Scheme’s liabilities.
Post-retirement mortality assumption - base table
Post-retirement mortality assumption - future
improvements
30 September 2021
30 September 2020
SAPS “S2” tables with scaling
factors of 90% for males and
females
SAPS “S2” tables with scaling
factors of 90% for males and
females
CMI 2018 projections
(A = 0.0%, Sk = 7.0) with
long-term improvement rate of
1.25% p.a. for males and females
CMI 2018 projections
(A = 0.0%, Sk = 7.0) with
long-term improvement rate of
1.25% p.a. for males and females
Life expectancy for male currently aged 60
Life expectancy for female currently aged 60
Life expectancy at 60 for male currently aged 40
Life expectancy at 60 for female currently aged 40
27.0
29.1
28.6
30.7
27.0
29.0
28.5
30.6
Cash commutation
Members assumed to exchange
15% of their pension for a cash
lump sum at retirement
Members assumed to exchange
15% of their pension for a cash
lump sum at retirement
The Scheme assets are invested in the following asset classes, each of which have a quoted market value:
Value at 30 Value at 30
Value at 30
September September
September
2020
2020
£000
£000
2021
£000
54,245
54,245
41,261
41,261
62,034
62,034
3,516
3,516
58,280
58,280
44,584
44,584
53,652
53,652
122
122
161,056
161,056
156,638
156,638
LDI/UK Gilts
Equities
Diversifi ed Growth Funds
Cash and Commitments
108 JERSEY ELECTRICITY
17 Pensions (continued)
The amounts recognised in the balance sheet and comprehensive income are set out below:
Reconciliation of funded status to balance sheet:
Fair value of Scheme assets
Present value of funded defi ned benefi t obligations
Funded Status and asset recognised on the balance sheet
Related deferred tax liability
Net pension asset
Breakdown of amounts recognised in profi t and loss
and other comprehensive income
Operating cost
Service costs:
Current service cost
Past service cost (including curtailments)
Administration expenses
Financing cost
Interest on net defi ned benefi t asset
Total pension expense recognised in profi t and loss
Remeasurements in OCI:
Return on plan assets in excess of that recognised in net interest
Actuarial (gains)/losses due to changes in fi nancial assumptions
Actuarial gains due to changes in demographic assumptions
Actuarial gains due to liability experience
Total amount recognised in OCI
Total (credit)/debit recognised in profi t and loss and OCI
Total (credit)/debit recognised in profi t and loss and OCI
Changes to the present value of the defi ned
benefi t obligation during the year
Opening defi ned benefi t obligation
Current service cost
Interest expense on scheme liabilities
Contributions by scheme participants
Actuarial (gains)/losses on scheme liabilities arising from changes in fi nancial assumptions
Actuarial gains due to changes in demographic assumptions
Actuarial gains on scheme liabilities arising from experience
Net benefi ts paid out
Past service costs (including curtailments)
Closing defi ned benefi t obligation
Closing defi ned benefi t obligation
Changes to the fair value of Scheme assets during the year
Opening fair value of Scheme assets
Interest income on Scheme assets
Remeasurement gains on scheme assets
Contributions by the employer
Contributions by scheme participants
Net benefi ts paid out
Administration costs incurred
Closing fair value of scheme assets
Closing fair value of scheme assets
2021
£000
2020
£000
£000
161,056
161,056
156,638
156,638
(142,295)
(142,295)
(149,323)
(149,323)
18,761
18,761
(3,752)
(3,752)
15,009
15,009
2021
2021
£000
£000
3,038
3,038
1,800
1,800
257
257
(128)
(128)
4,967
4,967
(5,250)
(5,250)
(8,864)
(8,864)
-
-
(689)
(689)
(14,803)
(14,803)
(9,836)
(9,836)
2021
2021
£000
£000
149,323
149,323
3,038
3,038
2,354
2,354
465
465
(8,864)
(8,864)
-
-
(689)
(689)
(5,132)
(5,132)
1,800
1,800
7,315
7,315
(1,463)
(1,463)
5,852
5,852
2020
2020
£000
£000
3,030
3,030
-
-
344
344
(211)
(211)
3,163
3,163
(3,766)
(3,766)
6,107
6,107
-
-
(678)
(678)
1,663
1,663
4,826
4,826
2020
2020
£000
£000
144,235
144,235
3,030
3,030
2,686
2,686
501
501
6,107
6,107
-
-
(678)
(678)
(6,558)
(6,558)
-
-
142,295
142,295
149,323
149,323
2021
2021
£000
£000
156,638
156,638
2,482
2,482
5,250
5,250
1,610
1,610
465
465
(5,132)
(5,132)
(257)
(257)
161,056
161,056
2020
2020
£000
£000
154,652
154,652
2,897
2,897
3,766
3,766
1,724
1,724
501
501
(6,558)
(6,558)
(344)
(344)
156,638
156,638
Annual Report and Accounts 2021 109
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 30 September 2021
17 Pensions (continued)
Actual return on scheme assets
Interest income on scheme assets
Remeasurement gain on scheme assets
Actual return on scheme assets
Actual return on scheme assets
Analysis of amounts recognised in comprehensive income (SoCI)
2021
2021
£000
£000
2,482
2,482
5,250
5,250
7,732
7,732
2021
2021
£000
£000
2020
2020
£000
£000
2,897
2,897
3,766
3,766
6,663
6,663
2020
2020
£000
£000
Total remeasurement gains/(losses) in other comprehensive income
14,803
14,803
(1,663)
(1,663)
Discount rate sensitivity
To show sensitivity of the results to the choice of discount rate, we have set out below the balance sheet and profi t and loss
impact of adopting a discount rate of 0.5% p.a. lower or higher than the current assumption.
Following a 0.5% p.a. decrease in the discount rate
Pension expense for the following year
DBO at 30 September 2021
Following a 0.5% p.a. increase in the discount rate
Pension expense for the following year
DBO at 30 September 2021
18 Share capital
Change
£000
743
13,217
Change
£000
(762)
(11,431)
New value
£000
3,300
155,512
New value
£000
1,785
130,864
‘A’ Ordinary shares 5p each (2020: 5p each)
Ordinary shares 5p each (2020: 5p each)
5% Cumulative participating preference shares £1 each
3.5% Cumulative non-participating preference shares £1 each
Authorised
Authorised
2021
2021
Issued and fully paid
Issued and fully paid
2021
2021
Authorised
2020
2020
Issued and fully paid
2020
2020
£000
£000
1,250
1,250
1,500
1,500
2,750
2,750
100
100
150
150
250
250
£000
£000
582
582
950
950
1,532
1,532
100
100
135
135
235
235
£000
£000
1,250
1,500
2,750
100
150
250
£000
£000
582
950
1,532
100
135
235
Equity shares
‘A’ Ordinary shares entitle the holder to 1 vote for every 100 shares held whereas the Ordinary shares carry voting rights of 1
vote for every 20 shares held. At 30 September 2021 there were 11,640,000 ‘A’ Ordinary and 19,000,000 Ordinary shares in issue.
Preference shares
Preference shares are classifi ed as fi nancial liabilities under IFRS. Dividends paid to preference shareholders in the year were
£9,000 (2020: £9,000) and are recorded in fi nance costs in the consolidated income statement. 5% preference shares carry
voting rights of 1 vote per 5 shares and 3.5% preference shares carry voting rights of 1 vote per 10 shares.
ESOP reserve
The Jersey Electricity Employee Benefi t Trust was established on 24 May 2012 when the Company introduced a new employee
share scheme for eligible employees of the Group based on a three year vesting period. As at 30 September 2021, 72,700 shares
have been awarded to employees who met the three year vesting period requirements. The Trust currently holds 26,600 shares
which will vest in August 2023. The shares have been purchased in instalments since the inception of the Trust at an average of
£4.64 per share. The Trust was funded by way of an interest free loan and for accounting purposes is seen as an extension of
the Group.
110 JERSEY ELECTRICITY
19 Non-controlling interests
Equity
At 1 October
Share of profi t on ordinary activities after taxation
Dividends paid
At 30 September
2021
£000
123
123
136
136
(101)
(101)
158
158
2020
2020
£000
£000
62
62
116
116
(55)
(55)
123
123
Non-controlling interests represent 49% (2020: 49%) ownership of the issued ordinary share capital of Jersey Deep Freeze Limited.
20 Financial commitments
a Five year capital expenditure approved by the directors:
Contracted
Not contracted*
2021
£000
2020
2020
£000
£000
1,045
1,045
80,525
80,525
81,570
81,570
6,610
6,610
67,146
67,146
73,756
73,756
*Although this sum is approved it is still subject to formal business cases being reviewed in due course.
21 Leasing
Operating leases with tenants
The Group leases out all its investment properties and certain other freehold properties under operating leases. The future
aggregate minimum rentals receivable under non-cancellable operating leases are as follows:
No later than 1 year
Later than 1 year and no later than 2 years
Later than 2 years and no later than 3 years
Later than 3 years and no later than 4 years
Later than 4 years and no later than 5 years
Later than 5 years
2021
£000
1,770
1,770
1,546
1,546
1,254
1,254
1,254
1,254
1,206
1,206
8,624
8,624
15,654
15,654
2020
2020
£000
£000
1,799
1,799
1,654
1,654
1,224
1,224
369
369
369
369
1,440
1,440
6,855
6,855
Annual Report and Accounts 2021 111
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 30 September 2021
22 Derivatives and fi nancial instruments and their risk management
Categories of fi nancial instruments
The carrying values of the fi nancial assets and liabilities of the Group are as follows:
Financial assets
Fair value through other comprehensive income
Derivative fi nancial instruments
Amortised cost
Secured loan accounts
Trade and other receivables (excluding prepayments)
Cash and cash equivalents
Financial liabilities
Fair value through other comprehensive income
Derivative fi nancial instruments
Amortised cost
Borrowings
Trade and other payables
Preference shares
2021
£000
2020
2020
£000
£000
108
108
1,237
1,237
308
308
16,750
16,750
43,136
43,136
60,194
60,194
300
300
15,025
15,025
35,520
35,520
50,845
50,845
2021
£000
2020
2020
£000
£000
2,130
2,130
143
143
30,000
30,000
9,641
9,641
235
235
39,876
39,876
30,000
30,000
10,406
10,406
235
235
40,641
40,641
The primary fi nancial risk faced by the Group is foreign exchange exposure as the largest single cost in the consolidated income
statement is the importation of electricity from Europe that is denominated in Euros.
The Group’s currency exposure at 30 September 2021, taking into account the eff ect of forward contracts placed to manage
such exposures, was £2.3m (2020: £2.6m) being the translated Euro liability due for imports made in September but payable in
October.
All fi nancial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy. This
hierarchy is based on the underlying assumptions used to determine the fair value measurement as a whole and is categorised
as follows:
Level 1 fi nancial instruments are those with values that are immediately comparable to quoted (unadjusted) market prices in
active markets for identical assets or liabilities;
Level 2 fi nancial instruments are those with values that are determined using valuation techniques for which the basic
assumptions used to calculate fair value are directly or indirectly observable (such as to readily available market prices); and
Level 3 fi nancial instruments are shown at values that are determined by assumptions that are not based on observable market
data (unobservable inputs).
112 JERSEY ELECTRICITY
22 Derivatives and fi nancial instruments and their risk management (continued)
Categories of fi nancial instruments (continued)
The derivative contracts for foreign currency shown above are classifi ed as level 2 fi nancial instruments and are valued using a
discounted cash fl ow valuation technique. Future cash fl ows are estimated based on forward exchange rates (from observable
forward exchange rates at the end of the reporting period) and contracted forward rates, discounted at a rate that refl ects the
credit risk of various counterparties.
Foreign exchange risk
The Group utilises currency derivatives to hedge the payment of a proportion of its future purchases of power from France
which currently extend to the next three calendar years.
Due to the nature of the Euro denominated purchases being largely underpinned by contracted amounts the Group has
accurate expectations of the values and timings of future liabilities, reducing the risk of exposure to hedge ineff ectiveness which
could only arise if units imported were to vary by more than 20% from established patterns.
Foreign exchange hedging instruments are contracted to mature as the liabilities fall due and so minimise any timing or other
uncertainties of future cash fl ows.
Currency derivatives
At the balance sheet date, the total notional amount of outstanding forward foreign exchange contracts that the Group has
committed are as below:
Forward foreign exchange contracts
Less than one year - operational expenditure
Greater than one year and less than three years
2021
£000
35,406
35,406
49,850
49,850
85,256
85,256
2020
2020
£000
£000
34,473
34,473
45,360
45,360
79,833
79,833
At 30 September 2021, the fair value of the Group’s currency derivatives is estimated to be a net liability of approximately £2.0m
over the next three years (2020: £1.1m asset). The fair value of currency derivatives that are designated and eff ective as cash
fl ow hedges amount to a liability of £2.0m (2020: £1.1m asset) and these amounts have been deferred in equity. Given the
limited exposure to foreign exchange rate risk at the year end no sensitivity analysis has been presented.
The fair value of currency derivatives that are designated and ineff ective as cash fl ow hedges amount to £nil (2020: £nil). In the
current period amounts of £3.1m were credited (2020: £1.3m debit) to equity and £3.1m debit (2020: £1.3m credit) recycled
to the consolidated income statement. Gains and losses on the derivatives are recycled through the consolidated income
statement at the time the purchase of power is recognised.
Fair value of currency hedges
Derivative assets
Less than one year
Greater than one year
Derivative liabilities
Less than one year
Greater than one year
Total net (liabilities)/assets
Commodity risk
2021
£000
-
-
108
108
(1,256)
(1,256)
(874)
(874)
(2,022)
(2,022)
2020
2020
£000
£000
960
960
277
277
(143)
(143)
-
-
1,094
1,094
Power purchases
The Group has power purchase agreements with EDF in France. As at 30 September 2021, the import prices, but not volumes,
have been substantially fi xed for 2022. The Group entered into a 10 year framework agreement with EDF on 1 January
2013 which has a commitment to procure around 35% of expected volume requirements at known prices. During 2017 this
agreement was extended a further 5 years to 2027. The remainder of the requirement will be decided by a market pricing
mechanism, but with no volume commitment, with a goal to deliver a degree of stability in tariff pricing to our customers.
The Company has the ability to generate power as an alternative to importation if this was viewed to be commercially and
environmentally acceptable.
Annual Report and Accounts 2021 113
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 30 September 2021
22 Derivatives and fi nancial instruments and their risk management (continued)
Credit risk
The Group’s principal fi nancial assets are cash and cash equivalents, short-term investments and trade and other receivables.
The Group’s credit risk is primarily attributable to its trade and other receivables. The amounts presented in the consolidated
balance sheet are net of allowances for expected credit losses which are set out below. The trade and other receivables at 30
September 2021 outside agreed credit terms are as follows:
Less than 30 days
Greater than 30 days
Greater than 60 days
Greater than 90 days
2021
£000
1,736
1,736
585
585
181
181
403
403
2020
2020
£000
£000
925
925
154
154
149
149
757
757
2,905
2,905
1,985
1,985
The credit risk on liquid funds and derivative fi nancial instruments is limited because the counterparties are banks with high
credit ratings assigned by international credit-rating agencies. The Group monitors its credit exposure to its counterparties via
their credit ratings and through its treasury policy, thereby limiting its exposure to any one party to ensure that they are within
Board approved limits and that there are no signifi cant concentrations of credit risk.
For trading related receivables, the credit worthiness and fi nancial strength of customers is assessed at inception and on an
ongoing basis. Payment terms are set in accordance with industry standards. The Group will enhance credit protection, when
appropriate, taking into consideration the Group’s exposure to the customer, by requesting securities such as deposits, moving
customers to pay as you go meters to manage credit risk and implementing payment plans for customers in arrears.
The Group has no other signifi cant concentration of credit risk. Exposure is spread over a large number of counterparties and
customers with a maximum credit exposure of £36.1m (2020: £33.3m).
Expected credit losses provision
The Group applies the IFRS 9 simplifi ed approach to measuring expected credit losses which assesses if a material expectation
exists for lifetime expected loss allowances against all trade receivables based on historic realised write-downs. Where specifi c
customers are viewed to be at risk of default due to known or expected economic circumstances, their receivable balances at
the balance sheet date are provided for in full.
An explanation of the Group’s assessment for calculating expected credit losses and balance write-off s is detailed in note 1.
An expected credit losses provision is recorded against assets which are past due but for which no individual provision is made.
This is calculated based on historical experience of levels of recovery.
Movements in the expected credit losses were as follows:
At 1 October
Charge for expected credit losses - included within operating costs
Amounts written back
At 30 September
Ageing of impaired receivables is as follows:
0 - 30 days
31 - 60 days
61 - 90 days
Greater than 90 days
114 JERSEY ELECTRICITY
2021
£000
476
476
43
43
(216)
(216)
303
303
2021
£000
72
72
12
12
7
7
212
212
303
303
2020
2020
£000
£000
122
122
381
381
(27)
(27)
476
476
2020
2020
£000
£000
269
269
151
151
5
5
51
51
476
476
22 Derivatives and fi nancial instruments and their risk management (continued)
Capital management
Strong capital management is an integral part of the Directors’ strategy to achieve the Group’s stated objectives. The capital
managed by the Group consists of borrowings, cash and cash equivalents and equity of the Group. The Directors review
fi nancial capital KPI’s on a monthly basis. The £30m private placement drawn down in July 2014 provides long-term funding
to the Group supplemented by a fi ve year £10m revolving credit facility. Liquid funds are managed on a daily basis and placed
on short-term deposits maturing to meet liabilities when they fall due. The Group is subject to externally imposed capital
requirements in respect of the borrowing facilities detailed in note 16. The Group has complied with these requirements
throughout the year.
Liquidity risk
The Group maintains a strong liquidity position and manages the liquidity profi le of its assets, liabilities and commitments so
that cashfl ows are appropriately balanced and all fi nancial obligations are met when due.
Maturity of fi nancial liabilities at 30 September
Maturity of fi nancial liabilities at 30 September
Maturity of fi nancial liabilities at 30 September
Less than one year
More than one year and less than fi ve years
More than fi ve years
2021
£000
21,041
21,041
33,508
33,508
45,446
45,446
99,995
99,995
2020
2020
£000
£000
19,741
19,741
31,186
31,186
46,785
46,785
97,712
97,712
Financial liabilities shown above include interest payments due on the £30m private placement.
Borrowing facilities
The Group had undrawn borrowing facilities at 30 September 2021 of £12.0m (2020: £12.0m) in respect of which all conditions
precedent had been met. The overdraft facility of £2.0m is annually renewable, and the Revolving Credit Facility was renewed in
July 2019 for a further fi ve years.
Maturity of fi nancial assets and liabilities
The fi nancial assets of the Group comprise deposits placed with banks which all expire in less than one year. The maturity
profi le of the Group’s fi nancial assets and liabilities at 30 September was as follows:
Maturity of fi nancial assets at 30 September
Less than 3 months: cash and cash equivalents and short-term investments
Greater than 3 months: short-term investments
2021
£000
27,136
27,136
16,000
16,000
2020
2020
£000
£000
30,520
5,000
Interest rate risk
Interest rate exposure on the £30m of private placements borrowing is managed by having fi xed coupons.
Annual Report and Accounts 2021 115
Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 30 September 2021
23 Ultimate controlling party and related party transactions
The Government of Jersey (the “Government”) treats the Company as a strategic investment. Whilst it holds the majority voting
rights in the Company the Government does not view the Company as being under its control and as such, it is not consolidated
within the Government accounts. The Government is understood by the Directors to have signifi cant infl uence but not control
of the Company. The Company has elected to take advantage of the disclosure exemptions available in IAS 24, paragraphs 25
and 26. All transactions are undertaken on an arms-length basis in the course of ordinary business.
Energy from Waste Plant
An Energy from Waste plant was commissioned in Jersey during 2011. Jersey Electricity signed a 25 year agreement in 2008
to purchase electricity produced at the plant by the Government and to share existing facilities with the Energy from Waste
plant. This gives rise to the most signifi cant value transactions with the Government during the year with the value of electricity
purchased from the facility during the year being £1.2m (2020: £1.5m) whilst the value of services provided to the plant was
£0.4m (2020: £0.4m).
Remuneration of key management personnel
The remuneration of key management personnel of the Group (which is defi ned as the Executive and non-Executive Directors)
is set out below. Further information about the remuneration of individual Directors is provided in the Remuneration Report on
pages 66 to 69.
Short-term employee benefi ts
Post-employment benefi ts
Non-Executive Director’s benefi ts
2021
£000
717
717
170
170
194
194
2020
2020
£000
£000
697
697
184
184
198
198
1,081
1,081
1,079
1,079
116 JERSEY ELECTRICITY
Five Year Group Summary (unaudited)
Financial Statements
Income Statement (£m)
Income Statement (£m)
Revenue
Operating profi t
Profi t before tax
Profi t after tax
Dividends paid (£m)
Balance Sheets (£m)
Property, plant and equipment
Net current assets*
Non-current liabilities
Net assets*
Financial Ratios and Statistics
Earnings per ordinary share (pence)
Gross dividend paid per ordinary share (pence)
Net dividend paid per ordinary share (pence)
Dividend cover (times)
Cash at bank/(net debt) (£m)
Capital expenditure (£m)
Electricity Statistics
Units sold (m)
% movement
% of units imported
% of units generated
% of units from Energy from Waste plant
Maximum demand (megawatts)
Number of customers
Customer minutes lost
Average price per kilowatt hour sold (pence)
Manpower Statistics (full time equivalents)
Energy
Other
Trainees
Total
Units sold per energy employee (000’s)
Number of customers per energy employee
2021
2021
2020
2020
2019
2018
2017
118.6
118.6
20.5
20.5
19.1
19.1
16.3
16.3
5.2
5.2
216.6
216.6
45.3
45.3
(87.5)
(87.5)
225.4
225.4
52.7
52.7
21.1
21.1
16.9
16.9
3.1
3.1
13.1
13.1
9.9
9.9
639
639
3.3%
3.3%
95.2%
95.2%
0.4%
0.4%
4.4%
4.4%
170
170
51,912
51,912
5
5
13.9p
13.9p
238
238
88
88
21
21
347
347
2,686
2,686
218
218
Restated
111.7
111.7
16.2
16.2
14.8
14.8
11.7
11.7
4.9
4.9
217.9
217.9
37.1
37.1
(83.0)
(83.0)
205.0
205.0
37.9
37.9
20.1
20.1
16.1
16.1
2.4
2.4
5.5
5.5
12.0
12.0
619
619
-1.2%
-1.2%
94.7%
94.7%
0.2%
0.2%
5.1%
5.1%
141
141
51,522
51,522
5
5
13.6p
13.6p
199
199
97
97
9
9
305
305
3,112
3,112
259
259
Restated
Restated
Restated*
110.7
105.9
102.1
16.1
14.8
11.9
4.7
217.0
27.9
(79.2)
198.6
38.4
19.1
15.3
2.5
(5.1)
13.3
627
-1.1%
94.1%
0.3%
5.6%
150
16.7
15.3
12.2
4.4
215.2
22.5
(76.4)
187.8
39.5
18.1
14.5
2.7
(14.3)
14.3
634
2.1%
94.9%
0.2%
4.9%
178
14.7
13.5
10.6
4.2
211.9
17.3
(78.5)
175.4
34.6
17.3
13.8
2.5
(21.9)
14.4
621
-0.6%
92.6%
1.5%
5.8%
154
51,103
50,561
49,894
6
13.3p
188
94
11
293
3,336
272
6
12.9p
186
102
14
302
3,411
272
8
12.9p
201
116
9
326
3,091
248
* See note 2 for prior year adjustment with respect to trade and other receivables.
Annual Report and Accounts 2021 117
Financial Statements
Financial Calendar
4 January 2022
Preference share dividend
17 February 2022
Record date for final dividend
3 March 2022
Annual General Meeting
24 March 2022
Final dividend for year ended 30 September 2021
18 May 2022
Interim Management Statement – six months to 31 March 2022
3 June 2022
Record date for interim ordinary dividend
21 June 2022
Interim dividend for year ending 30 September 2022
1 July 2022
Preference share dividend
20 December 2022
Preliminary announcement of full year results
Annual General Meeting
The Annual General Meeting will be held at the Powerhouse, Queens Road, St. Helier, Jersey on Thursday 3 March 2022 at 12:30pm.
Details of the resolutions to be proposed are contained in the Notice convening the Meeting.
Press releases and up-to-date information on the Company can be found on the Company’s website (www.jec.co.uk).
118
JERSEY ELECTRICITY The Powerhouse, PO Box 45
Queens Road, St Helier JE4 8NY
Tel 01534 505460
Fax 01534 505565
email jec@jec.co.uk
www.jec.co.uk
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a sustainable source.