The power behind
a net-zero Jersey
Annual Report and Accounts 2022
Inspiring a
zero-carbon future
Jersey Electricity plc is the sole supplier of electricity
in Jersey, serving over 52,000 business and
residential customers. The Company’s operations
include the transmission, distribution, generation
and supply of electricity as well as a range of energy
related services and solutions.
Directors, Officers and Professional Advisers
NON-EXECUTIVE DIRECTORS
Phil Austin
MBE, FCIB, FCMI (Chair)
Alan Bryce
MSc, CEng, FIET
Wendy Dorman
BA, ACA
Tony Taylor
BSc (Hons)
Amanda Iceton
BA (Hons)
Kayte O’Neill
BA (Hons)
EXECUTIVE DIRECTORS
Christopher Ambler
BA, MEng, CDipAF,
CEng, MIMechE, MBA
(Chief Executive)
Martin Magee
CA (Finance)
SECRETARY
Andrew Welsby
BA, MA, FCIPD
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
Contents
How we performed in 2022
STRATEGY
Our Purpose, Vision and Values
Strategy for achieving our Vision
Chair’s Statement
Chief Executive’s Review
Our Business and Business Model
Energy
Health, Safety and Environment
Other Businesses
Climate:
Sustainability Framework
Opportunity for Energy Growth
Electric Transport
Price Stability and Affordability
Technology
Stakeholders
Customers
Our people
Other stakeholders
Outlook
Financial Review
Group Risk Management
TCFD Disclosures
GOVERNANCE
Board of Directors
Directors’ Report
Corporate Governance
Nominations Committee Report
Audit and Risk Committee Report
Remuneration Committee Report
Statement of Directors’ Responsibilities
Independent Auditor’s Report
FINANCIAL STATEMENTS
4
5
6
6
8
10
12
14
16
18
20
24
24
28
30
32
34
36
36
42
48
52
54
58
66
74
74
78
79
81
84
87
91
92
98
JERSEY ELECTRICITY
How we performed in 2022
Our Key Performance Indicators (KPIs) are quantifiable
measurements which help gauge overall performance and
help make informed decisions about our operations and
strategy. Detail of why we view these items as key indicators
of performance is contained in the relevant sections within
this Annual Report.
Jersey Electricity KPIs
2022
2021
2020
Revenue (£m)
Profit 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
117.4
10.6
17.8
613
2
4.2
5
22
77
7.8
118.6
111.7
19.1
14.8
16.9
16.1
639
619
2
5.9
5
23
78
1
6.8
5
24
77
8.1
8.3
Annual Report and Accounts 2022
5
Our Purpose, Vision and Values
Our Purpose
Our Purpose is to ‘enable life’s essentials’ by providing the people of Jersey with secure,
reliable, affordable and sustainable electricity today and long into the future.
Our Vision
Our Vision is to ‘inspire a zero-carbon future’ by being the energy partner of choice whilst
working to the seven pillars of that Vision.
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
of Jersey’s Carbon Neutral
Roadmap by growing
electricity’s share of the
energy market, reducing
carbon emissions, helping
to conserve resources and
protecting the environment.
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.
6
JERSEY ELECTRICITYStrategy Our Values
Our six core Values are key to our culture. They guide the behaviours
we expect of each other as we work towards our Vision.
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.
Teamwork
We value diversity and
respect and value our
colleagues as individuals.
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.
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.
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 2022
7
Strategy for achieving our Vision
Increase electricity’s share
of the energy market.
Enable customers to convert
domestic and commercial
premises to value-for-money,
low-carbon electric heating
and cooling solutions.
Develop local, affordable renewable
energy for anyone who wants it.
Develop e-mobility and EV charging
solutions to encourage cleaner,
more efficient, electric transport.
Provide integrated
services ‘beyond
the meter’ that put
customers at the
heart of the energy
system.
8
Our strategies and work streams
will enable us to achieve our Vision.
They are also aligned with,
and are fully supportive of the
Government of Jersey’s net-zero
carbon emissions ambitions.
JERSEY ELECTRICITYStrategy Lead in the application
of technology to benefit
customers by providing
new and improved
services and driving
efficiency in our business.
Create value for all
stakeholders, by providing
fair pricing for customers
and fair returns for
shareholders.
Deliver a well-invested network
and a highly skilled, diverse and
engaged workforce committed
to a zero-carbon future.
Annual Report and Accounts 2022
9
Chair’s Statement
Resilience in a
turbulent year
Chair of the Board, Phil Austin MBE, leads
a highly experienced team of Executive and
independent Non-Executive directors providing
strategic leadership and robust corporate
governance to promote the long-term success
of the Company.
The turmoil that beset international
energy markets in late 2021 has
intensified further due to the
escalating conflict between Russia
and Ukraine, leading to a previously
unthinkable global energy crisis.
This has presented major new
challenges to energy companies post
the pandemic, sending wholesale
prices soaring and threatening
supply security throughout Europe.
Jersey Electricity is not immune
to these challenges, but we have
shown resilience, returning a strong
Group performance and protecting
our customers from the huge retail
price rises seen elsewhere, without
Government intervention.
Performance
Group revenue for the year at £117.4m
was 1% lower than last year and
profit before tax was £10.6m against
£19.1m in 2021. If the non-cash upside
from the revaluation of investment
properties is excluded in both years,
the underlying year-on-year profit
before tax is £9.6m against £13.0m in
2021, a fall of 26%.
10
This year’s financial performance
reflects the effects of COVID-19
post the pandemic. Coupled with a
mild winter, a return to more normal
patterns of work and behaviour
has reduced demand, with both
unit volume sales in Energy, and
£117.4m
Group revenue 2022
Retail revenues, down on last year
as electricity consumption and
Powerhouse product sales returned
to historical levels. The Board has
recommended a final dividend for
the year of 10.80p, a 6% rise on the
previous year, payable on 23 March
2023. Our target return on assets
continues to be 6%-7% over the long
term and was 4.2% this year, but 6.2%
on a rolling five-year basis.
Energy markets
Elsewhere, the scale of the energy
crisis has prompted Governments
across Europe to intervene, each
in their own way, to mitigate the
impact of the rising prices on their
citizens. In the UK, such Government
intervention averted a proposed 80%
year-on-year increase in energy prices
in October when Ofgem was due to
raise the regulated price cap to £3,549.
The new Energy Price Guarantee
now limits this cap to £2,500 a year
until April 2023 when the cap will be
increased to £3,000, prompting a
further 20% price rise.
Although our hedging and risk
mitigation policies have so far
sheltered Jersey customers from such
material price increases, we are not
immune to these market forces. We
therefore implemented a 4% tariff rise
from 1 January 2022 and a further 5%
increase from 1 July 2022, at which
time we announced a further 5% tariff
increase effective from 1 January 2023
to give our customers some degree of
certainty for the coming winter period.
JERSEY ELECTRICITYStrategy
Climate change
Despite the current challenges
presented by the global energy crisis,
climate change remains the biggest
challenge we all face. We remain
optimistic about the future, however,
and the opportunities a net-zero
Jersey will bring. Our low-carbon,
Smart-enabled grid provides a strong
platform to support the Government
of Jersey’s net-zero 2050 carbon
ambitions. In addition, increased
digitalisation of our systems is enabling
us to map scenarios and calculate the
investment needed in the network.
Publication of the Government’s Carbon
Neutral Roadmap in May gives us
confidence and certainty to make these
from where we imported 95% of our
power this year, we have modelled
various scenarios and evaluated our
mitigations for technical failures
to the submarine cables and other
disruptions to supply. We have also
established contingency plans to
implement increased local emergency
generation if required.
To increase energy sovereignty
longer term, we are reviewing our
energy sourcing strategies, with
more detailed investigations into the
viability of offshore wind generation
which has fallen significantly in cost.
Details on this work stream, and our
solar PV progress, can be found on
pages 16 and 28.
‘ Our standard domestic tariff rate (the rate by which
we benchmark against the EU and other jurisdictions)
continues to be less than half a UK consumer is paying’
investments and ensure we are well-
placed to meet future challenges.
In April 2022, the UK became the first
G20 country to introduce legislation
making it mandatory for large
businesses to disclose climate-related
financial information in line with the
Taskforce on Climate-related Financial
Disclosures (TCFD) recommendations.
Jersey Electricity supports these
recommendations and is working
towards full compliance. Details of our
progress and how we are supporting
the Government’s Carbon Neutral
Roadmap for net-zero 2050 are set out
on pages 24-27, 66-73 and throughout
this report.
Energy security
Although last year’s French fishing
dispute, which raised questions about
energy sovereignty and the security
of imported power supplies, has been
resolved, the global energy crisis
has kept us focused on the issue. To
mitigate the supply security threats
the energy crisis is causing in Europe,
Corporate Governance
In line with the UK Corporate
Governance Code 2018, the Board sets
out areas of focus for the year which in
2022 included:
• Progressing stakeholder
engagement
• Extending workforce diversity
• Developing our culture and
employee engagement, and
• Exploring energy sourcing
strategies to facilitate Jersey’s
net-zero carbon 2050 aims and
increase energy sovereignty.
I am pleased to report substantial
progress in all these areas and
detailed commentaries on each
are presented later in this report.
Stakeholder engagement, p48-49
workforce diversity, p42-45; culture
and engagement, p46-47; and energy
sourcing strategies, p16.
Furthermore, 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 respective reports
on pages, 81, 84, and 87.
The Board has determined its key areas
of focus for 2023 to be as follows:
• Progressing stakeholder
engagement.
• Building on our cultural values of
employee engagement, diversity,
and inclusion.
• Addressing affordability by helping
customers use energy efficiently,
and deploying smart technology to
drive our own efficiency.
• Investing in a resilient network
and developing energy sourcing
options, to facilitate Jersey’s net-
zero goal and to increase energy
sovereignty.
The Board welcomed Kayte O’Neill as
a Non-Executive Director in March.
Kayte brings a wealth of experience
to our team as Executive Director of
the National Grid Electricity System
Operator (ESO), where she designs and
facilitates markets to enable future
operation of the UK’s electricity system
on the path to net-zero.
In conclusion
I would like to thank our entire
‘JE family’ for their hard work,
commitment and dedication this past
year which has presented renewed
challenges post COVID-19. I am
immensely proud of what we have
achieved together and the progress we
have made on the course we have set.
I also thank my fellow Board
members for their hard work and
commitment, and our shareholders
for their support. I remain confident
the Company and its people can take
advantage of the opportunities the
future holds and meet the challenges
it will demand of us all.
20 December 2022
Annual Report and Accounts 2022 11
Chief Executive’s Review
Optimism on the
road to net-zero
Chief Executive Chris Ambler leads the development of Jersey
Electricity’s strategy, as agreed by the Board, as well as its
implementation. In a turbulent year for energy markets, he
remains confident that strategy continues to deliver for the
business, Jersey Electricity’s customers and Jersey’s net-zero
carbon ambitions.
Having weathered the storm of
the COVID-19 pandemic over the
previous two years, the global
energy crisis, precipitated by the
prolonged war with Russia in
Ukraine, has this year presented
significant new challenges to energy
companies and Jersey Electricity is
no exception. As well as the tragic
humanitarian cost of the conflict in
Ukraine, global energy prices have
soared, and security of supplies
has come under threat. As a stark
illustration of this, at 30 September
2022, the forward baseload
electricity prices for the calendar
year 2023 were around €500/MWh,
approximately 10 times historical
levels.
Our strategy
Despite this, Jersey Electricity has
shown great resilience in these
turbulent times and we remain
confident in our strategy for
achieving our Vision which aims to
help the Government of Jersey and
the Island itself achieve its net-zero
carbon target of 2050. Our key
strategic initiatives are outlined on
pages 8-9 and our progress on each,
along with the value we create for the
community and our shareholders, is
detailed throughout this report.
12
Pricing
Providing affordable, secure and
sustainable supplies of electricity
now and into the future, is our
primary objective. Our strategy
and our integrated business model
have served the Island well. We
have been able to maintain stable
and competitive energy prices
over this period without the need
for Government subsidies seen in
the UK. This is substantially due
to our forward hedging and risk
management policies in both power
procurement and foreign exchange
purchases. We import 95% of Jersey’s
electricity requirements from EDF in
France and our hedging has delivered
enormous value to the households
and businesses, protecting the local
economy and our customers from
what would otherwise have been
much higher price rises.
We implemented a 4% tariff rise
from 1 January 2022 and further 5%
increase from 1 July 2022 at which
time we announced a further 5% tariff
increase effective from 1 January
2023, to give our customers some
degree of certainty for the coming
winter period. Even with these price
increases, our standard domestic tariff
is less than half that of the UK. Noting
that UK prices are already enjoying the
benefit of UK Government subsidies,
we estimate Jersey’s prices are around
a third of UK pre-subsidised prices
(based on previously determined
Ofgem estimates).
Financial performance
The result is Energy revenues at
£89.7m were marginally lower than
the £89.8m achieved in 2021. Lower
unit sales of electricity (613m this year
v 639m in 2021) were attributed to a
mild winter, slower cannabis industry
sales and reduction in home working
as the Island came out of the worst of
the pandemic. An easing of consumer
spending also saw revenue in our
Powerhouse retail business decrease
6% from £19.8m in 2021 to £18.7m and
profits decrease 23% from £1.5m to
£1.2m, remaining at a resilient level
and still higher than pre-pandemic
JERSEY ELECTRICITYStrategy
£89.7m
Energy revenues 2022
levels. Revenue in the Property
business at £2.3m was the same as
last year. JEBS, our building services
business, maintained revenues at
£3.4m and profitability at £0.3m, while
revenue in our other businesses at
£3.3m, was also in line with last year.
Climate change
Despite the turbulence created by
the pandemic and the energy crisis,
Jersey Electricity and the Island have
good reason to be optimistic about
the future. The recent trauma in
energy markets further emphasises
the importance of clean energy in
the energy trilemma that includes
affordability and supply security, and
we are even more confident of the
important role we play in the Island’s
fight against climate change.
The publication of the Government’s
Carbon Neutral Roadmap in May 2022
sets out the milestone and policies
for delivering net-zero by 2050. This
presents huge opportunities for
growth for the Company, particularly
in the high-emitting sectors of heating
and road transport, which together
represent more than 80% of overall
Island carbon emissions. We expect
this growth to also bring benefits to
consumers in the form of even better,
more cost-effective services and a
more efficient energy system.
Our electricity system is very well
invested for the future, and we are
making great progress in innovating
new products but we also know that
additional investment is needed in the
network to meet the increase in both
peak demand and annual consumption,
and to replace certain aged assets. New
technologies and the digitalisation of
our business will have a critical role in
the future to help direct and optimise
its capital investments and create
efficiencies throughout the business
and we have greatly increased our
resources in this area.
‘ Jersey Electricity has shown great resilience in these
turbulent times and we remain confident in our strategy for
achieving our Vision and helping the Government of Jersey
achieve its net-zero carbon target of 2050.’
Customer focus
New technologies are also helping
us to put customers at the heart of
the energy system by providing new
services and helping customers make
decisions to save energy and costs.
Our energy saving app My JE was
recognised Island-wide by winning
the Digital Jersey Technology Award
for Sustainability. We have presented
it on an international stage at the
World Utilities Congress in Abu Dhabi
this year and we have continued
its development with important
upgrades. We are developing similar
tools targeted at business customers
and have made good progress with
these this year.
A new cloud-based Customer
Relationship Management tool
provides the latest in customer service
technology enabling us to improve
our engagement through various
channels to understand and better
meet customer needs. A new digital
asset management system has also
been implemented and is helping us
materially improve performance.
Renewables
The global energy crisis has kept
us focused on the issue of energy
sovereignty. The Carbon Neutral
Roadmap and the Bridging Island Plan
support more on-Island renewables
and we have continued to progress
utility and commercial scale solar PV
while also continuing our research
into offshore wind, which we are
confident could have an important role
in Jersey’s energy system, benefiting
from reducing costs of installation and
higher yields.
One 4MWp solar PV site in the Parish
of St Clement is in Planning and we
have reached landowner agreement
for a further 3MWp site on the
North coast at Sorel. These and two
other ground based sites, could
bring on-Island solar generation
to around 15MWp. We are hopeful
these will receive good support
from the community and authorities
particularly in the current challenging
energy climate. On offshore wind, we
have held constructive discussions
with the new Minister for the
Environment and, as a consequence,
we are continuing our research and
assessments.
Our people and culture
Our people are key to our success and
to the delivery of our Vision. We need
the right talent in the right place at the
right time to enable Jersey to achieve
its net-zero ambitions. We must recruit
and retain the very best by being an
Employer of Choice in Jersey and that
means having a diverse workforce and
an inclusive culture where everyone
feels valued and supported. I am
therefore delighted that our work in
this area has been recognised by our
Diversity and Inclusion (D&I) partners,
Inclusive Employers, ‘promoting’ us
from ‘Programmatic’ to ‘Established’
following this year’s D&I maturity audit.
Along with a strong underlying
performance, this is one of many
achievements of which I am very
proud in this turbulent year and
believe that with the continued
commitment of our people, we will
make better decisions, innovate
strongly and execute our strategies for
achieving a zero-carbon future and a
better Island for all.
Annual Report and Accounts 2022 13
Our Business and Business Model
Our core operations
include the transmission,
distribution, generation
and supply of electricity
and the provision of energy
related services for which
we operate several other
complementary businesses.
We build, operate and invest
in low-carbon electricity
infrastructure, including
a smart-enabled grid.
We seek to create value for
customers and our Island
community by providing
high quality affordable
services, and create value for
shareholders by providing
a fair return on assets
consistent with the rate of
return of typical regulated
entities in the UK over the
long-term.
The more units of energy
we distribute across the
network, the more efficient
it becomes to operate due
to economies of scale and
the unitisation of fixed costs.
This helps us to maintain
lower and more competitive
prices and will, we believe,
enable Jersey to transition to
net-zero by 2050 more cost
effectively.
14
JERSEY ELECTRICITYStrategy We take a long-term
view of our business and
the services we provide,
focusing on being cost
effective and efficient whilst
managing risk. Our risk
management framework*
helps us to meet our
strategic, financial and
operational objectives
whilst enabling us to
take measured risks that
incentivise innovation and
growth.
* More information on our Group Risk
Management is detailed on page 58-65
We seek to deliver a
sustainable ‘return on assets’
to our shareholders 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 6%-7% over
the long term and was 4.2%
in 2022 but 6.2% on a rolling
five-year basis.
Our pricing model aims to
provide stable risk-adjusted
returns for our investors,
who we aim to compensate
for that risk. This confidence
of investors – both
shareholders and lenders
– enables us to make long-
term strategic decisions
and large investments in
infrastructure and services.
This, in turn, ensures we
can deliver a robust, reliable
network, now and for the
future.
4.2%Actual return on assets 2022
(5.9% in 2021)
‘ We take a long-term view of
our business and the services
we provide, focusing on being
cost effective and efficient
whilst managing risk.’
Annual Report and Accounts 2022 15
Energy
Electricity transmission, distribution and generation forms
our core business. Operations Director Mark Preece reviews
the activities of our Energy Division.
Demand
COVID-19 continued to affect energy
consumption this year. A return to
more normal patterns of work and
behaviour, coupled with a mild winter,
reduced demand. Unit sales fell 4%
from 639m to 613m kilowatt hours.
Similarly, peak demand, recorded
on 22 December 2021, ‘normalised’
at 145MW, well below last year’s
170MW and our record of 178MW
set in March 2018.
We imported 95.3% of our
requirements from France (2021:
95.2%) and generated 0.3% of our
electricity on-Island from our solar PV
arrays and diesel plant (2021: 0.4%).
We purchased the remaining 4.4%
(2021: 4.4%) of our electricity from
the local Energy from Waste plant.
613mKilowatt hours
145MW
Peak demand
95.3%
Energy imported from France
Renewables
Last year’s French fishing dispute
raised the issue of energy sovereignty
and the security of imported power
supplies. Although this dispute has
been resolved, the global energy crisis
has kept us focused on the matter.
One of our strategic work streams has
been to develop an energy sourcing
strategy, including further research
into offshore wind feasibility, to meet
the Island’s net-zero carbon agenda
and increase energy sovereignty.
While we continue to expand our on-
Island solar PV generation capabilities
(details p28), we now view offshore
wind generation as increasingly viable
due to falling costs. The Government’s
Carbon Neutral Roadmap and the
Bridging Island Plan both identify
an offshore wind farm as being of
potential strategic value to the Island.
Not only would such a project provide
greater energy independence, but
the scale of local resources would
also provide several times the
Island’s need, providing a commercial
opportunity for Jersey to become a net
exporter of energy. We have therefore
renewed our research efforts this year
and held discussions with the new
Minister for the Environment.
Generation
Maintaining our generation assets
at La Collette Power Station and
Queen’s Road is essential to mitigate
the ‘low probability’ but ‘high impact’
risk of disruption to imported power
supplies. Due to the new threats to
European supplies caused by Russia’s
invasion of Ukraine we have stepped
up our preparedness with an
infrastructure project that increases
our on-Island generation capability
by 40MW by allowing us to connect
multiple, mobile diesel generation
sets, sourced from the UK, to our
system, enabling us to meet all but
the severest winter demands.
16
JERSEY ELECTRICITYStrategy Transmission
The completion of the new 75MVA
90/33 kV transformer at La Collette
last year meant we could commence
work on a project that will see a new
90/11kV transformer installed at
Queen’s Road as part of the long-
term development plan for our 90kV
network.
This work will also allow the eventual
decommissioning of the ageing
33kV cable interconnectors between
Queen’s Road and La Collette and
provide further options to enhance
supply security and facilitate the
load growth net-zero will bring by
allowing us to install more generation
plant at La Collette.
Service Delivery
Our Service Delivery team is
already feeling the positive impact
net-zero will bring. Workload has
continued to increase in the general
construction industry across the
Island and to meet the demands of
carbon reduction. This has included
supporting the ongoing growth in
the connection of solar PV feeding
into our network.
Our planning team are already
working with clients on 54 future
larger schemes and have 44 active
construction schemes in progress.
This has resulted in the installation
over 27km of cable, the completion
of over 1,900 joints, the installation of
seven new distribution substations
and a further 11 substations
upgraded to support ongoing load
growth.
Distribution
The ArcGIS project is key to enabling
JE to meet the demands of the
Government’s Carbon Neutral
Roadmap for the journey to net-zero
by assessing the investments needed
over the next 10 to 15 years to meet
the demand of the conversion of
20,000 premises to electric heating
and large-scale overnight EV charging.
Our new Work and Asset
Management System (WAMS) is now
gathering data and trends to yield
optimum operational efficiencies
from our industrial workforce and
move forward our maintenance
programmes on the distribution
network and production plant located
at La Collette. (Further details, p35)
Electricity sources
2021/2022
+0.1%
JE
EfW
Import
0.3%
4.4%
95.3%
-0.1%
0.0%
Annual Report and Accounts 2022 17
Health, Safety and Environment
As one of our core Values, the safety of our customers,
the public and our people is paramount. The nature of our
activities can be hazardous if not properly managed.
Following a return to more normal
working patterns after the challenges
presented at the height of the pandemic,
we have remained vigilant, amending
measures to ensure the safety of
employees, visitors and contractors
as positive COVID-19 cases have risen
and fallen throughout the year.
Our participation in Government
Strategic Coordination Group
meetings ensured we had the most
up-to-date information to make
quick decisions to ensure business
continuity and the best service for
our customers.
Approach to risk
We ensure all employees are fully
competent in the work we ask them to
do and that they recognise their own
limits of competency.
We have a ‘risk-based’ approach
to HSE with employees proactively
identifying hazards through regular
risk assessments.
18
JERSEY ELECTRICITYStrategy Contractor Management
The Procurement department
and HSE Team implemented a
contractor management tool called
SafeContractor, to ensure the highest
standards of contractor management
are practised throughout our
supply chain. Contractors are
vetted in areas such as health and
safety performance, training and
sustainability. Uptake has been
positive, with more work to be done to
ensure comprehensive accreditation.
Incident Management
The next step in incident
management will be our introduction
of a safety software tool, EcoOnline.
This platform will manage all
incident and accident data across the
organisation, displaying data in real
time, over a fixed period or by type,
ensuring flexibility and efficiencies
for departments. An auditing module
within the platform will also simplify
the process of recording and tracking
actions created from site visits.
The winning employee submission
in a competition to mark World
Day for Safety and Health at Work
was a ‘root cause analysis’ model
for accident investigation. The HSE
team is now exploring how this
might be incorporated into business
operations.
Accident performance remains similar
to the previous financial year, which
saw two lost time incidents (LTIs)
reported. These two LTIs represent
32 lost working days due to injury.
Year
2018
2019
2020
2021
2022
Lost Time
Injuries
Days
Lost
3
1
1
2
2
9
4
7
10
32
Annual Report and Accounts 2022 19
Other Businesses
Our other commercial businesses, complement our core Energy
business, and their activities are aligned with our Group purpose,
strategies and Vision.
fuel prices. These include electric
cargo/family bikes, which we believe
will play an increasingly important
role in decarbonising the transport
network in Jersey. As a result of these
investments, our revenue in the
emobility category grew by 23%.
We have also invested in our Service
Department and are looking to
recruitment three new technicians to
support the introduction of further
new product lines. We are now the on-
Island service agent for Sony and have
other service contracts in the pipeline.
Powerhouse.je
Despite a challenging year, with supply
chain issues and a shift in consumer
confidence, our retail business has
performed well and delivered a
£1.2m profit on a decreased turnover
of £18.7m as consumer spending
returned to pre-pandemic levels.
Resilience was also shown among
the Retail team which displayed
great flexibility to maintain levels
of customer service, having been
impacted by higher than usual
employee turnover as more members
chose to progress their careers in
other parts of the Company.
We have continued to invest in
enhancing the in-store customer
experience by this year expanding
and improving the entrance to the
store and thereby, increasing usable
floor space by 730 square feet. We
have used this additional space to
develop our emobility proposition by
introducing several new electric bike
brands which are proving very popular
with consumers conscious of rising
23%Increase in emobility
category revenue
20
JERSEY ELECTRICITYStrategy
JEBS
JEBS, our building services division,
has been instrumental in helping
our Energy Solutions team achieve
a record 325 domestic fuel switches
this year and the successful launch of
the all-inclusive, home EV charging
solution Easycharge as well as
continuing to help us expand the
public EV charging network. Although
recruitment continues to be an issue
in this field, revenues were maintained
at £3.4m (and £4.1m including internal
revenue from within the Group) and
profits were marginally ahead of 2021
at £0.3m.
The quality and value of the service
JEBS provide was reflected in the
award of a three-year Amenity
Lighting Maintenance contract for
both the Infrastructure, Housing and
Environment Department and the
Parish of St Helier.
As part of the Group’s climate strategy,
JEBS have replaced eight of its ageing
fleet of diesel vehicles with fully
electric alternatives, with a further
four expected in service by March
2023.
‘ JEBS have replaced eight of its
ageing fleet of diesel vehicles
with fully electric alternatives’
Annual Report and Accounts 2022 21
Other Businesses continued
The order book remains full with
the building services design
for Les Ozouets, a new higher
education campus in Guernsey, the
refurbishment of Maison de Landes
Hotel, a variety of Andium projects,
including refurbishment and upgrade
works to all high-rise residential
blocks, the new-build development
of 140 apartments at The Limes, and
the commercial kitchen replacement
at the prestigious Atlantic Hotel.
Working closely with the Energy
Solutions team, Jersey Energy has
also designed, developed and trialled
various EV charging schemes for a
multitude of scenarios, including
the design of the first ultra-rapid
charger in the Channel Islands at the
Powerhouse.
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 team’s
expertise is in much demand today
as the islands look to transition to
net-zero.
Recruitment continues to be a
challenge in this specialised industry
but the team, under a new director
following a retirement, completed a
number of notable projects this year.
These included the refurbishment of
St Helier Marina, completed in time
for the Jersey Boat Show in June, a
new Channel Islands Co-operative
Society retail outlet at Five Oaks and
the final phase of a seven-year project
to redevelop housing at Grand Vaux
Court was completed in May.
22
‘ the team’s expertise is
in much demand today
as the islands look to
transition to net-zero.’
JERSEY ELECTRICITYStrategy JENDEV
Jendev provides digital Enterprise
Resource Planning (ERP) solutions
for all business areas (including
external clients), delivering a mix of
standard and bespoke systems. It
specialises in Microsoft Dynamics
business applications but has the
implementation expertise required to
deliver projects across a wide range of
technologies.
The small team provides the Group
with easy access to the required digital
skills, including business analysis,
consulting, design, development,
training and project management
and has been instrumental in the
integration and delivery of modern
cloud-based solutions, such as the new
Customer Relationship Management
(CRM) platform and Work and Asset
Management (WAMS) solution into
Jersey Electricity’s core ERP solution.
It has also been at the heart of the
development of the award-winning
My JE app.
The Jendev team continues to expand
its digital know-how, focused on
strategic and relevant technologies.
This will ensure that it can deliver
the latest innovations in the utilities
industry.
‘ It has also been at the
heart of the development
of the award-winning
My JE app.’
Property
Our Property portfolio includes
a B&Q store and Medical Centre
situated on our Powerhouse retail
and administration office site at
Queen’s Road as well as 29 private
houses and flats that are rented on the
open market. The £1.4m profit in our
Property division, excluding the impact
of investment property revaluation,
was at the same level as last year.
Our investment property portfolio
moved up in value by £1.0m to £28.8m,
based on advice from our external
consultants, who review the position
annually. This increase compared to
£6.1m in the 2020/21 financial year
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 increased the valuation,
due to continued buoyant market
conditions in Jersey.
£1.0mIncrease in value of
property portfolio
Annual Report and Accounts 2022 23
Climate: Sustainability Framework
Jersey Electricity has long been a key driver of Jersey’s
reduction in carbon emissions by providing the community
with low-carbon power. Chief Executive Chris Ambler
sets out the Company’s strategy for further climate action,
including a Sustainability Framework for achieving the
Company’s net-zero carbon goals.
In May this year we welcomed the
publication of the Government of
Jersey’s Carbon Neutral Roadmap
which sets a course for Jersey to
achieve net-zero emissions by
2050. We were actively involved in
the Citizen’s Assembly on Climate
Change which preceded the report
and were pleased that many of our
recommendations on the draft were
included in the final report. We are
now engaged with Government as it
develops the Policies to achieve the
Roadmap’s targets.
Jersey Electricity’s Vision is to ‘inspire
a zero-carbon future’, and several
of our strategic work streams are
aligned with Government ambitions.
The Roadmap has given us some
certainty on the Government’s
intentions and our on-going dialogue
with Government and other key
stakeholders help to mitigate the
risk associated with the transition,
in particular, around further
infrastructure investment required
to meet the increase in peak demand
and annual consumption that net-zero
would bring.
We are well-placed to help the Island
achieve net-zero and in doing so fulfil
Company objectives. We have already
reduced emissions from the supply
of electricity in Jersey by over 90%
since 1990, driving a 36% reduction in
the Island’s overall carbon emissions
despite a 60% increase in electricity
consumption.
Our strategy to import low-carbon
nuclear and hydro power from France
has helped us to virtually completely
decarbonise the electricity system,
calculated at just 22gCO2/kWh for
2021/22. This, coupled with our
smart-enabled grid has given us
a platform with spare capacity for
further decarbonisation. Increased
digitalisation of our systems to
leverage Smart Meter data has
enabled us to map various scenarios
for our network and focus the
investment needed in a more efficient
and targeted way. The long-term
Government strategy the Roadmap
provides gives us more confidence to
make these investments.
90%Reduction in emissions from
the supply of electricity in Jersey
since 1990 due to our strategy
to import power from France
24
JERSEY ELECTRICITYStrategy We set out (below) our Sustainability Framework mapped to
the United Nations Sustainable Development Goals* and we
are developing a suite of targets that deliver on our ambitions,
including our Scope 1,2 and 3 emissions targets.
TCFD disclosures in full, p66-73.
* The United Nations Sustainable Development Goals or Global Goals are a collection
of 17 interlinked global goals designed to be a ‘shared blueprint for peace and
prosperity for people and the planet, now and into the future’.
• We will seek to deliver an
affordable, secure and
sustainable energy supply
for all islanders.
• We will drive Jersey’s
energy transition to
net-zero.
• We will provide solutions
and services to enable
customer and community
transitions to net-zero.
• We will reduce emissions
from our operations.
• We will reduce waste
and drive sustainability
across our business
wherever we can.
• We will contribute
to regeneration of the
Island’s ecosystem.
• We will create champions
of sustainability through
our culture and values.
• We will celebrate diversity
and inclusivity in our
organisation.
• We will embed health,
safety and wellbeing in
all we do and develop
our people to be the best
they can be.
Our Island
We will be leaders, working
collaboratively with others
in the drive to Jersey’s
net-zero future.
Our Footprint
We will achieve net-zero
emissions by 2050 and
inspire excellence
in environmental
stewardship.
Our People
We will build a sustainable,
diverse and inclusive
culture, equipping our
people to thrive into
the future.
Annual Report and Accounts 2022 25
Climate: Sustainability Framework continued
We are well-placed to help the Island achieve net-zero and
fulfil our Company’s objectives. We have already reduced
emissions from the supply of electricity by over 90% since
1990, driving a 36% reduction in the Island’s overall emissions
despite a 60% increase in electricity consumption.
26
JERSEY ELECTRICITYStrategy To assist with the development of our
Sustainability Framework and fully embed it in
our culture we have created an Environmental
Sustainability Committee made up of 14
employees, including senior managers, and
sponsored by our Operations Director.
The Committee meets monthly and aims to:
Develop and manage sustainability
programmes and practices.
Identify opportunities to improve the
wellbeing of our people, their families
and communities.
Oversee the completion of recommendations
from environmental audits, focusing on
continual improvement.
Implement education and communication
programmes across all aspects of
sustainability.
Report on environmental performance
across the Company to prioritise goals
and action plans.
Oversee public relations and external
communications efforts.
Monitor the reduction of waste, including
hazardous chemical use.
Implement programmes/solutions
to increase recycling.
Institute environmentally sustainable
purchasing strategies, including reusable
materials and equipment.
Promote and report on energy and water
conservation.
Annual Report and Accounts 2022 27
Climate: Opportunity for Energy Growth
Two important strands of our strategy to achieve our Vision
and support the Island in achieving net-zero by 2050 in line
with our TCFD commitments, are to put JE at the forefront
of solar PV and the electric vehicle charging market, and to
grow energy market share. Director of Commercial Services
Peter Cadiou, who oversees the Energy Solutions team
responsible for these areas, reports on progress.
The Government of Jersey’s Carbon
Neutral Roadmap published in May
sets a course for achieving net-zero
by 2050. While not without risks,
the recommendations within the
report, particularly around the
high-emitting sectors of heating and
transport, provide huge opportunity
for increasing electricity’s share of
the energy market from its current
39%*. As we plan and invest to
meet such challenges as converting
c.20,000 fossil fuel boilers bring, we
are reassured that the first £23m of
Government funding from the Climate
Emergency Fund is secure for the
first four years of the Roadmap. We
are also actively involved supporting
Government and developing workable
initiatives in the heating and transport
sectors.
Fuel Switches
Our Energy Solutions team, formed
seven years ago specifically to develop
customer propositions to deliver
growth through fuel switching, has
continued to grow and strengthen
its organisational capability. The New
Product and Proposition team, created
last year, has recruited two Product
Managers and a Product Development
Analyst, while upskilling existing staff
in programme management, business
analysis, and product management.
Although unit sales volumes fell
slightly this year from 639m to 613m
kilowatt hours, the team exceeded
its internal target of domestic fuel
switches for the third year running,
converting 325 premises from fossil
fuels and reducing their carbon
emissions by around 90% per
premise. Operational efficiencies that
streamline the customer journey from
initial enquiry to installations have
made the fuel switch process faster
and smoother than ever.
613mUnit sales
We have also made progress in the
commercial and public sectors by
making it easier for businesses and
public sector consumers such as
the Parishes, which own community
buildings and housing stock, to
convert from fossil fuels to low-carbon
electricity. This included fuel switching
our first church from oil to Quartz
ray heaters. By building relationships
with these stakeholders and devising
bespoke funding models we have
been able to further reduce their
carbon footprint by incorporating EV
charging and solar PV installations to
complement the fuel switch.
Solar PV
Utility and Commercial scale solar PV
continues to be an important focus.
The Carbon Neutral Roadmap and the
Bridging Island Plan support more on-
Island renewables to increase energy
sovereignty and we have made much
progress in this area.
In March, we signed an agreement
to install our fifth commercial -scale
solar array on the roof of the Albert
* Source: Government of Jersey Energy Trends Report 2021
28
Bartlett potato processing plant. At
612kWp, and with over 1,500 solar
panels installed, the Albert Bartlett
array is the largest in the Channel
Islands, surpassing those already
commissioned at Woodside Farm
and Jersey Dairy and will generate
over half a million kWhs a year when
commissioned in 2023.
During the year, we also progressed
plans for a utility -scale ground-
mounted solar array . One 4MWp site
in the Parish of St Clement is already
at formal planning stage. We have
reached landowner agreement for a
further 3MWp site on the North coast
at Sorel, and two other sites are in the
development pipeline which could
bring on-Island solar generation to
around 15MWp.
‘… the team exceeded its
internal target of domestic
fuel switches for the third
year running, converting
325 premises from fossil
fuels and reducing their
carbon emissions by
around 90% per premise.’’
JERSEY ELECTRICITYStrategy Total customers
52,473
+561
Total customers
on discounted
heating tariffs
21,918
+983
Total customers on E20
4,520
+956
Highest ever total fuel
switches
325
Annual Report and Accounts 2022 29
Climate: Electric Transport
Decarbonising transport, particularly road transport as an
emitter of 44% of Jersey’s emissions, is critical to the Island’s
net-zero ambitions. The Carbon Neutral Roadmap recognises
this as a ‘priority area for action’ and proposes several
measures to increase low-carbon transport, including a ban on
the importation and registration of petrol and diesel vehicles
new to the Island from 2030.
Public charging
As uptake in electric transport
grows, our strategy is to ensure the
Island and our network are ready
to meet the increase in electricity
demand and that we have a wide
range of infrastructure in place.
At year end we had expanded the
public charging network to 109
charging points in service – twice the
UK average per capita – catering for
all EVs. This now includes the Channel
Islands first ultra-rapid charger at our
Powerhouse headquarters to provide
faster charging specifically for new
vehicles with larger batteries.
The 150kW dual unit, which is three
times more powerful than our
existing three 50kW rapid chargers,
can provide a single EV with 100
miles range in just nine minutes, the
equivalent of 11 days’ driving based
on the Jersey average of 4,000 miles
a year.
Home charging solution
In May we launched our innovative,
all-inclusive home EV charging
subscription service Easycharge.
The project, involving collaboration
between our Energy Solutions New
Propositions team, Distribution,
Metering, JEBS and Finance, provides
customers with the charger,
installation, maintenance and
overnight off-peak electricity for a
fixed monthly subscription.
The service not only supports
customers in accessing safer,
affordable and convenient charging, it
enables us to better manage load and
avoid higher network costs by moving
load from peak times to overnight
off-peak periods when we have spare
capacity and energy costs are lower.
30
‘ It is exceptionally
encouraging that JE are
starting to introduce the
next generation of fast
charging facilities. JE are
a vital partner in the Island’s
push to reduce carbon
emissions and I look forward
to working with the company
to help us achieve our
carbon reduction targets.’
Environment Minister
Jonathan Renouf
JERSEY ELECTRICITYStrategy The service provides drivers with
three options: £30 a month for
single EV households, £45 a month
for multi-EV homes and £85 for
commercial or high mileage users.
Response to the service has been
very positive.
The future
Looking forward, we intend to
expand our EV charging subscription
services to serve multi-unit
residential properties. Building
on the Easycharge features and
leveraging the latest platform
technology to provide load balancing
and virtual billing, we will connect
residents with their dedicated
parking space within a communal
parking area. We are also developing
propositions to support workplace,
destination, on-street, and en-route
charging.
‘ It is exceptionally
encouraging that JE are
starting to introduce the
next generation of fast
charging facilities. JE are
a vital partner in the Island’s
push to reduce carbon
emissions and I look forward
to working with the company
to help us achieve our
carbon reduction targets.’
Environment Minister
Jonathan Renouf
Total number of electric vehicles registered
in Jersey at year end 2022
Cars
1,264
+349
Vans
241
+44
Motorcycles
133
+31
Works trucks
50
+3
+427 on last year
Annual Report and Accounts 2022 31
Price Stability and Affordability
Creating value for our customers starts with fair, affordable
electricity prices. Global events over the past year have meant
achieving this, while providing sustainable, low-carbon power
and supply security, have made this more challenging than
ever. Finance Director Martin Magee reports on why Jersey
consumers have fared better than in many jurisdictions.
Maintaining competitively priced
power has always been a key focus
of Jersey Electricity and we continue
to perform well against other
jurisdictions in an ever-increasingly
turbulent market.
The unprecedented increases in
European wholesale electricity prices
seen at the end of the last financial
year have intensified throughout 2022.
Although prices were rising before
the onset of the war with Russia in
Ukraine, the on-going conflict has sent
will be scaled back to £3,000 in April
2023, prompting a further 20% rise in
prices.
Jersey is not immune to these market
forces, but our hedging policies have
so far sheltered Jersey customers
from such material double-digit price
increases. We implemented a 4% tariff
rise from 1 January 2022 and further
5% increase from 1 July 2022. Even
after these rises are considered, we
continue to benchmark well against
other jurisdictions.
‘ Our hedging policies have so far sheltered Jersey customers
from material double-digit price increases seen elsewhere’
energy costs soaring, threatening
supply security throughout Europe
and creating a global energy crisis.
At year end, the forward baseload
electricity prices for 2023, at c€500/
MWh, were around 10 times the level
seen historically in markets.
Since the beginning of 2021, 31 UK
energy companies have ceased trading
due to soaring wholesale prices, and
only Government intervention of
billions of pounds of subsidies averted
a proposed 80% year-on-year increase
in retail energy prices in October when
Ofgem was due to raise the regulated
price cap to £3,549. The new Energy
Price Guarantee limits this to £2,500 a
year for an average domestic dual fuel
bill, but this has now been reduced
from two years to just six months and
Our standard domestic tariff rate*
(the rate by which we benchmark
against the EU and other jurisdictions)
continues to be around half the level
a UK consumer is paying and around
one third of pre-subsidised prices in
the UK, a third lower than the Isle of
Man, a quarter lower than Guernsey
and 10% lower than the EU14 average,
noting that this latter metric has yet
to reflect the recent upturn in energy
markets. We announced a further 5%
tariff increase effective from 1 January
2023, when we last increased tariffs in
July 2022 to give our customers some
degree of certainty for the coming
winter period. It is also worth nothing
that unlike other jurisdictions, where
Governments are heavily subsidising
electricity process, no such measures
have been applied in Jersey.
*Standard domestic tariff based on single rate customers using 3,750 kWhs a year including standing charges and all taxes
32
JERSEY ELECTRICITYStrategy
31UK energy companies ceased
trading since 2021
We imported 95% of the electricity
requirements of Jersey from Europe
this year. Our current supply
framework agreement with EDF in
France runs until the end of 2027 and
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
2023 and 2024 and for an element of
the period 2025-2027. This hedging
has protected customers from what
would otherwise have been much
higher rises to date, and greater rises
in the future.
We also enter forward currency
contracts on a three-year rolling
programme to reduce exposure, and
to aid tariff planning.
We believe we can continue to
maintain any tariff rises at an
affordable level without Government
intervention in the short to medium
term. In today’s turbulent world it is
difficult to predict what the longer-
term forecast will be for energy prices.
Even if the war in Ukraine ended
quickly, it is extremely unlikely energy
prices will revert to pre-pandemic
levels, so we will continue our efforts
to help our customers reduce costs by
energy saving measures wherever we
can.
Annual Report and Accounts 2022 33
Technology
Technology brings efficiencies and opportunities for the
business and more control and convenience for our customers.
Director of Technology Werner Bornman reports on progress
in 2022 and looks ahead to 2023.
My JE
Our energy saving mobile
application My JE, launched in 2021,
was recognised for its contribution to
the Island’s carbon reduction targets
– in line with our TCFD commitments
– by winning the Digital Jersey
Technology Award for Sustainability.
Over 17,000 Islanders have
downloaded the app which leverages
Smart Meter data to help customers
better manage their electricity
consumption. This year we made its
features available to a broader base of
customers by launching a companion
web-based version for use on desktop
computers and PCs for those who do
not have access to a smart phone.
Further enhancements for
2022 included multi-premises
capabilities that enable owners
of multiple properties to access
energy consumption across all their
properties via a single interface, and
a disaggregation feature. The latter
provides additional insight on where
energy is consumed by category of
appliance, such as heaters, cookers,
lighting, entertainment.
Before the end of the calendar year
My JE consumption information
will also be available to our 3,000+
pre-payment customers, with more
enhancements planned for FY23 as
we continue to help customers save
energy and support Jersey on its
journey to net-zero.
17,000+
My JE app downloads since launch
34
JERSEY ELECTRICITYStrategy CRM
We successfully implemented a new cloud-based
Customer Relationship Management platform this year,
providing the latest in customer service technology
including opportunities for omnichannel customer
engagement, and guaranteeing consistency of service
delivery across all business channels.
Cyber Security
Cybersecurity remains a key focal point. We continually
invest in our cybersecurity toolsets to combat new
threats in an ever-changing landscape. This has
included advanced, cloud-based vulnerability and threat
assessment tools.
Data Lake
We have invested in a world-class, cloud-based data
lake that enables efficient analysis of a significant
amount of Smart Meter data to provide new insights
into network asset utilisation. This, in turn, enables us
to target infrastructure investment where and when it is
most needed, optimising our infrastructure investment
strategy. Our integrated business model is allowing JE to
be far more targeted in our investment programme and
enables high capital efficiencies.
ArcGIS
We have now completed the migration, begun last
year, of our existing cable records and operational
distribution/transmission schematics to the world-
leading ESRI Geographical Information System ArcGIS.
In partnership with Jersey-based Digimap, ArcGIS
provides a modern GIS mapping solution that provides
a higher degree of geospatial data sets for planning and
analysis. Coupled with the deployment of mobile devices
such as iPads to frontline Energy employees, the solution
brings operational efficiencies in data access and in-field
diagnostics and decision-making.
WAMS
We have also completed the roll-out across the entire
Energy Division of the new Work and Asset Management
System (WAMS) that utilises the world-leading platform
Hexagon EAM. The WAMS project is now gathering
data and trends that will yield optimum operational
efficiencies from our engineering workforce and
move forward maintenance programmes both on the
Distribution Network and production plant at La Collette
Power Station.
Looking ahead to 2023
• We will be partnering with Vaiie, Jersey Post’ digital
transformation company, to enhance our billing and
customer communication capabilities.
• We will launch a commercial customer portal to provide
insights into business energy consumption.
• We will evolve our public EV charging platform with the
next generation of fast chargers and additional services
to keep pace with increased uptake of low-carbon
electric transport.
Annual Report and Accounts 2022 35
Stakeholders Customers
Service innovation
Meeting and exceeding our customers’ expectations goes
beyond providing them with an affordable and reliable electricity
supply. Our strategy involves ‘putting customers at the heart
of the energy system’ by providing integrated services ‘beyond
the meter’, gaining insights into their needs and helping them
to manage and save energy. Technology is at the core of this
transformation. Customer Care Manager Kate Gosson reviews
this year’s developments.
New Contact Centre
We have been working and training
towards the launch in October 2022
of a new cloud-based contact centre
solution that will improve customer
experience by aligning how Customer
Care, Retail and Emergency out-of-
hours teams handle and respond
to calls from customers, whatever
their query. The Webex Contact
Centre (Cisco System) solution brings
users the flexibility and agility of
the cloud with built-in security and
scalability. It will provide insights to aid
management reporting and enable
us to better understand and improve
customer journeys.
Richer insights
Dynamics Customer Voice is an
application integrated with our new
cloud-based Customer Relationship
Management (CRM) tool (see p29).
A CRM case closure triggers a survey
for that customer asking them about
their experience with us. Customer
Voice captures that feedback,
enabling us to reach back to those
customers who may feel ‘dissatisfied’
and quickly address any unresolved
issues. ‘Satisfied’ feedback, usually
in the form of compliments, enables
us to recognise and reward those
employees or departments that have
provided an exceptional customer
experience and improve employee
engagement.
36
JERSEY ELECTRICITYStrategy JE Connect
To better understand our customers
and provide insights to guide our
strategic thinking beyond our regular
customer surveys, we this year formed
the customer panel JE Connect.
The group, from a wide range of
customers, regularly interact with
us on electricity and energy-related
topics. They are also available for us
to consult on strategic issues, such
as testing marketing campaigns or
provide in-depth insights on matters
such as fuel switching behaviour,
pricing, or bills.
Carbon calculator
A newly-launched Sustainability Hub
on our website includes a useful home
heating carbon calculator that enables
customers to see by how much they
can reduce their home’s carbon
footprint by switching from fossil fuels
to electric heating. We aim to build out
the calculator’s capabilities to include
transport and other lifestyle choices
in FY23.
Attitude Tracker
Our new on-line Attitude Tracker,
run by an independent research
agency, enables us to monitor
attitudes and sentiments on a
range of energy-related issues
quarterly. The question set covers
strategic areas across the business,
including Energy Solutions, New
Product Development, Employee
Value Proposition and Retail. The
results help us to:
• understand customer attitudes
towards the cost, sustainability,
and security of Jersey’s electricity.
• inform our communications
and gauge if we are influencing
attitudes and perceptions.
• shape our approach to
proposition and technology
developments.
My JE app
Our energy saving mobile
application My JE, launched in 2021,
has now been downloaded over
17,000 times and was recognised for
its contribution carbon reduction
by winning the Digital Jersey
Technology Award for Sustainability.
New developments this year
have included a companion web-
based version for use on desktop
computers and PCs and multi-
premises capabilities. The app will
also be available to our pre-payment
customers before the end of the
calendar year. Further details p34.
Annual Report and Accounts 2022 37
Stakeholders Customers continued
Customer satisfaction
Customers are one of the seven pillars of our Vision:
‘We put customers at the heart of our business, giving them choice,
control and value for money in a transparent and trusted way.’
To achieve this, we must understand their needs and
expectations of us. We measure our success and obtain
insights to improve our services through various channels.
OVERALL
RANKING
Jersey Electricity
would sit in 16th
position out of
35 UK utilities
in the Index
OVERALL
16
UK Customer Satisfaction Index (UKCSI) 2022
JERSEY ELECTRICITY
UTILITIES
ALL-SECTOR AVERAGE
EXPERIENCE
COMPLAINT
HANDLING
CUSTOMER
ETHOS
EMOTIONAL
CONNECTION
ETHICS
OVERALL
SATISFACTION
78.7
49.0
76.3
74.8
75.4
77.2
(2021 78.4)
75.4
65.3
73.3
72.6
71.8
79.4
66.4
77.7
77.6
76.6
74.1
(2021 73.5)
78.4
(2021 77.4)
This year we broadened our research
with the launch of JE Connect
Customer Panel and Attitude
Tracker. The panel enables us to
gain qualitative insights. The tracker
provides quantitative analysis, and
the ability to measure progress on key
issues from a customer perception
/ attitudinal perspective. Panel
meetings are due to commence in Q1
2022/23.
Panel members also joined other
members of the public in our
new Attitude Tracker. Run by an
independent research agency,
the Tracker enables us to monitor
attitudes and sentiments on a range of
energy-related issues quarterly.
The UK Customer Satisfaction Index
(UKCSI) benchmarks us against larger
UK utilities. Although our July 2022
overall rating of 77.2 was slightly
down on last year’s 78.4, which could
be attributed to our two tariff rises in
2022, we remain above the average
rating of the 35 UK utilities taking part
which was 74.1. In the power utilities
sector, only six scored higher.
We again scored higher than UK
utilities in the customer priority
areas of Experience, Customer Ethos,
Emotional Connection and Ethics, with
complaint handling again being an
area for improvement.
To address this we are reviewing
our complaint handling processes,
increasing complaint handling training
across key areas of the business and
introducing specialists to manage in
Customer Care more effectively.
38
JERSEY ELECTRICITYStrategy Previous year comparison
EASE OF DEALING WITH AN ISSUE
2022
2021
2020
COMPETENCE OF STAFF
2022
2021
2020
BILLING
2022
2021
2020
HELPFULNESS OF STAFF
2022
2021
2020
PRODUCT/SERVICE RELIABILITY
2022
2021
2020
OUTCOME OF COMPLAINT
2022
2021
2020
HANDLING OF COMPLAINT
2022
2021
2020
ATTITUDE OF STAFF
2022
2021
2020
SPEED OF RESOLVING COMPLAINT
2022
2021
2020
80
83
81
83
84
82
82
85
83
83
84
82
83
84
83
46
54
58
42
56
60
50
59
70
53
56
61
30
40
50
60
70
80
Annual Report and Accounts 2022 39
Stakeholders Customers continued
Key findings
75%of people said their
primary motivation
for saving energy
was to save money
“ The company seems to have some
understanding of cost of living
pressures on the average person and
controls costs well.”
% who support the use or expansion of…
Solar panels
Tidal power plant
Off-shore wind turbines
On-shore wind turbines
90%
87%
83%
58%
“ Would like to see a move towards
renewable energy.”
“ No disruptions and reasonable costs.”
23%of homeowners said they are
likely to consider solar panels
in the next 12 months
21%to consider buying
an electric/hybrid
vehicle within
12 months
“ I can keep up to date with how much
electricity I am using with their app.
Helps me to keep in budget.”
40
JERSEY ELECTRICITYStrategy
Words positively associated
with Jersey Electricity ranked:
Ranking of most
important feature:
LOCAL
RELIABLE
COMPETENT
PROFESSIONAL
HELPFUL
EFFICIENT
APPROACHABLE
RESPONSIBLE
51%
5
3
%
Cost to
customers
1%
3
y
p l y
r it
u
p
S
e
u
c
o f s
3
0
%
Environ
considerations
ental
m
CUSTOMER-FOCUSED
57%
28%
Consumer concerns
about energy use:
53%were concerned about
the financial cost of
their energy use
36%were concerned
about Jersey’s
dependence on
others
34%
of people were
concerned about
the environmental
impact of their
energy use
% who trust Jersey Electricity “a lot”
or “completely” when it comes to…
ensuring an uninterrupted supply of electricity
supporting and caring for its employees
developing high performing employees
doing the best for the environment
ensuring electricity is affordable for customers
70%
54%
48%
37%
29%
“ Rarely have loss of
power and not as
expensive as UK.”
“ I think JE has done a
brilliant job in keeping
the cost of electricity
so low. When
other jurisdictions
are considered
it is a fantastic
achievement.”
3%
6%
24%
26%
41%
66%of people were
satisfied or very
satisfied with
Jersey Electricity
Very satisfied
Satisfied
Neutral
Dissatisfied
Very dissatisfied
Annual Report and Accounts 2022 41
Stakeholders Our people
Diversity, Inclusion and Equality
Our people are key to JE’s success and to the delivery of our
Vision. We want people who are aligned to our Purpose and
Values and who care about sustainability and our business.
It is essential that we have the right talent and capabilities in
the right place at the right time enabling the Island to achieve
its net-zero carbon ambitions. We must therefore attract,
engage, support, train, motivate and retain the best people
we can. Our ‘People Strategy’ – and a pillar of our Vision is to
be an ‘Employer of Choice in Jersey.’ We also strive to be a ‘Great
Place to Work’ and a ‘High Performing Organisation’. A diverse
workforce and an inclusive culture are essential to achieving
these goals. Director of Human Resources Andrew Welsby
reports on progress in these strategically key areas.
42
JERSEY ELECTRICITYStrategy Diversity and Inclusion (D&I) has been a strategic area of focus since the 2018 launch of our cultural change programme
designed to enhance our Employee Value Proposition. We have continued to progress this strategy this year.
WHAT WE DID
PURPOSE
Two training programmes rolled out:
> To underpin knowledge of our D&I strategy:
1. Equality and diversity charity Liberate
delivered ‘Inclusive Leadership’
training to all ELT and SLT members.
To understand their own biases and how attracting a diverse talent pool can
be a source of competitive advantage when supporting diverse, fast changing
markets.
2. 59 frontline personnel undertook
‘Better Together’ programme.
D&I briefings at all contractors’
local inductions
D&I Working Group (of people
holding a protected characteristic)
attend team briefing
CEO and HR Director conducted
D&I strategy awareness sessions
with full SLT
Calendar of D&I awareness
campaigns on dedicated
D&I Teams channel
Menopause Support Policy
launched
To raise awareness of the impact workplace banter can have on inclusivity.
> To ensure they are aware of our commitment to a diverse and inclusive work
environment.
> To promote our D&I agenda.
> To stimulate discussion, debate, and ownership of our D&I agenda.
> To help colleagues better understand these agendas should they choose.
> To support people going through the menopause.
Signatory to the 14-point,
on-Island, ’51 Employers’ pledge
> To ensure we offer a menopause-friendly workplace.
Gold sponsor of 2022
Channel Islands Pride
> To promote our inclusivity credentials and allow our D&I Working Group
to engage with the LGBTQ community about our Vision.
Industry partner for Primary
Engineer the largest on-Island
schools engineering competition
Used more diverse imagery
(gender, age, ethnicity) in
apprentice recruitment campaigns
> To promote STEM careers to help improve gender balance in STEM subjects.
> To increase number of women, older workers and those from different ethnic
groups, that consider an apprenticeship with us.
HR Now network of HR Directors
presentation of our D&I strategy
> To share the D&I challenges with other Island businesses.
Annual Report and Accounts 2022 43
Stakeholders Our people continued
I am pleased to report that our chosen
specialist D&I partners, Inclusive
Employers, have ‘promoted’ us from
‘Programmatic’ to ‘Established’
following this year’s maturity audit
for which we had to evidence that:
• We understand the business
case and use this to inform a
strategic approach.
• We seek best practice and use this
to improve our D&I capability.
• D&I is a leadership responsibility.
WHAT WE DID
Understanding the business
case for D&I
> • D&I strategy e-booklet published accessible to all employees.
• D&I awareness training sessions on considering D&I in business cases.
How we consider D&I
in our strategy
• D&I topics discussed at face-to-face team briefings.
• D&I Forum Group tasked with promoting the need for D&I.
> • D&I impact assessments embedded as part of PMO business case process.
• Clear focus on D&I in HR workstreams as well as Sustainability and
Communications strategies .
• Accessibility audit to drive potential change to Facilities strategy.
• Assessment of facilities space at the Powerhouse and La Collette Power Station
to include wellbeing spaces and other inclusive spaces.
How we seek best practices
> • Membership of Inclusive Employers giving access to best practice and materials
monthly.
• Building relationships with Liberate Jersey, a charity that promotes diversity
and equality.
• Involvement in local and national (EU Skills) strategic workstreams to understand
sector challenges around D&I.
Leadership training and capability
> • D&I training for ELT and SLT members.
• New leadership behaviour framework draws on ‘inclusive leadership’ behaviours.
• Team leads and managers tasked with adding D&I to meeting agendas.
• HR Business Partners highlight D&I considerations with hiring managers during
recruitment process.
Role-modelling inclusive behaviour > • External PR showcasing JE’s approach and belief in D&I.
• Employee Value Proposition promotional materials using diversity to promote
JE as an inclusive workplace.
• ‘Better Together’ training delivered to operational teams to set behavioural
expectations.
• Signatory of the 51 Employers menopause pledge.
• JE is one of only a few Jersey organisations to engage Liberate Jersey to conduct
an accessibility and inclusion audit.
Next steps for 2023
WORKSTREAM
ACTION
Workplace culture
> Continue to review and develop policies, if required, with engagement of D&I
Working Group.
Recruitment
> Promote key achievements from 2021-22 activities to enhance EVP which
helps attract candidates from a diverse range of backgrounds.
Schools Engagement
> Continue partnerships with schools, profiling apprentice and graduate hires at JE.
Performance and Data
> Review and consider updates to training (depending on our emerging position)
and continue partnerships with EU Skills, Inclusive Employers and Liberate.
44
JERSEY ELECTRICITYStrategy 373
TOTAL EMPLOYEES (FTEs)
89
WOMEN EMPLOYED
14
NATIONALITIES REPRESENTED
17
APPRENTICES
22
WOMEN EMPLOYED
IN ENERGY ROLES
5
WOMEN IN SENIOR
LEADERSHIP TEAM
Case study
Elissar El-Khatib
Planning Engineer
41
AVERAGE
EMPLOYEE AGE
12
YEARS
AVERAGE SERVICE
‘ Engineering allows me to have a
positive impact on multiple fronts.
The theoretical planning and work we
perform results in Islanders benefiting
from a reliable electricity supply which
is essential to quality of life. Our
decisions, made in collaboration with
other departments, also have an
important environmental impact by
reducing carbon emissions to help
combat global warming. Thirdly, women
in engineering dispels the notion that
it’s a man’s world and contributes
toward women’s empowerment and
equality. It is no longer a job “for the
boys”; it is a place for creativity and
innovation. My advice to other women
considering engineering as a career is
to follow your instinct, do what you love,
strive for the best, work on fulfilling your
dreams and achieving your goals. Don’t
let anything stop you. It won’t at JE!’
Tessa Ryan
Senior Asset Engineer
‘ I completed my BASc in Engineering
Science in 2015 and began a four-year
apprenticeship to become a licensed
Professional Engineer (P.Eng) with a
major power utility. I saw opportunities
for business improvement if we
could address uncertainties around
underground cable conditions and
installation environments. I started an
MSc in Engineering Management to
research how best to manage the tricky
primary cable asset class. My research
grew to PhD level and I joined JE as a
Senior Asset Engineer in January 2022.
Employers, like JE, are recognising that
diversity leads to better creative and
financial outcomes. You are valued for
who you are and the unique perspective
you bring to problems. Engineering
is a great career for the curious, and
the skills you develop enrich your life
outside of work, changing how you
look at and understand the world
around you.’
Annual Report and Accounts 2022 45
Stakeholders Our people continued
Employee Engagement and Wellbeing
We have continued to invest in improving our Employer
Value Proposition to enable the business to attract and retain
the best talent in a highly competitive and low unemployment
environment.
Our goals are to be an ‘Employer of
Choice,’ a ‘Great Place to Work’ and
a ‘High Performing Organisation’.
Our people strategy has continued
to focus on these areas, and we
view employee engagement and
employee wellbeing as crucial to
achieving all three.
High Performing Organisation
Living Leader: Good leadership is vital to the success of
any business, and we are committed to embedding the
Living Leader programme. Living Leader has the highest
level of sponsorship by the Chief Executive and the
Board who have also benefited from the programme
when it was launched. In the last four years over 270
employees have attended the programme. This year,
four new Masterclass trainers became certified to
support our goal.
Senior Leadership Team (SLT) Skills: Succession planning
and development to meet future business needs are
essential to any High Performing Organisation. This
year, we commissioned an external adviser to assess and
define the development needs of our SLT members to
help them advance their careers, improve capabilities and
provide the business with more succession optionality.
Apprenticeships: Skilling up for a zero-carbon future is
essential for sustained business success and Jersey’s
net-zero ambitions. Our three-year apprenticeships are
an important part of that. This year we tried to broaden
the appeal of our apprenticeships by applying the Living
Wage to these roles and using more inclusive imagery to
appeal to a variety of age groups on social media.
Graduate Sponsorship: Our Bursary Scheme is enabling
three students to gain valuable work experience in
the field during holidays from their university studies.
They can join us as a graduate, having developed their
academic knowledge and having gained real-time
experience on the JE network which is very valuable to us
as we build future capability.
Board Apprentice: 2022 brought our third Board
apprentice, Catherine Madden (Government of Jersey
Chief of Staff), as we seek not only to nurture talent for
the future of JE but also provide added social value by
growing on-Island talent in supporting leaders who
aspire to Board roles.
Case study
Taneisha de Gruchy
Apprentice Plumber (JEBS)
‘ I feel I am contributing to society in
an effective way by being part of an
essential trade having previously worked
in retail. I’ve always loved practical work
and I particularly enjoy seeing bigger
jobs through from start to finish. I’m
excited about becoming fully qualified
and being able to work on my own.
I think you need to be very independent
and confident to tackle difficult jobs
plumbing presents when you’re working
alone. I have a had a lot of training and
support from JE as my apprenticeship
means I can earn while also attending
college. Being a woman in the trade
opens up a lot of conversations. There
have been challenges but everyone at JE
have been really welcoming and helpful,
and you can tell that the management
really care about their workers, which is
nice in such a large company.’
46
JERSEY ELECTRICITYStrategy Case study
Catherine Madden
Board apprentice
Why did you decide to take part in the
scheme, and why JE?
Whilst I have sat on Boards in previous
roles, I thought it would be a good to
experience first-hand the role of a non-
Executive in a private company. I believe
the role of a Board non-Executive will
provide me with the right level of work
life balance, whilst enabling me to give
something back by putting my skills and
experience, gained during my career, to
good use.
‘ My first JE Board meeting was very
insightful, seeing how diverse Board
members, with a variety of skills and
experience, work together in a positive,
productive, and proactive way for the
good of the Company. Everyone was
very welcoming, and all members
explained the agenda items, so I was
able to clearly understand the order
of business.’
Great Place to Work
Wellbeing:
Engagement: Engaged employees
that feel valued and motivated
help turn an organisation into a
Great Place to Work. We engage
with our people various ways to
ensure everyone feels they have a
voice and can make a difference
- Annual survey: Excellent
response rate of 80%. Rating
of 7.8 a good result in period of
challenging internal change,
slightly down on last year’s 8.1.
- Engagement groups: set up
across various levels of the
business to provide more
in-depth insights and robust
action planning.
- Culture and Engagement
Forum: Created in 2020, meets
four times a year with rotating
Board member participation
to ensure employees are heard
at the top of the business and
provide insights of culture
issues at the highest level.
Confidential
Assistance
Programme UNUM
Yoga
Sports and
Social Club
Free health checks
Subsidised gym
memberships
11 Mental
Health First
Aiders
Medical
insurance
Free healthy
snacks
Financial wellbeing
pensions seminars
PLUS:
- Menopause awareness sessions
- Dress for the Day Policy introduced
- Menopause Support Policy introduced
- Family friendly Hybrid Working
Policy introduced
- Electric vehicle subsidies to help
employees reduce carbon in line
with our Vision
Employer of Choice:
- Jersey Employers Group Schools and Early Careers initiative to promote
STEM subjects and the utility sector as a career choice
- Kit sponsor for Accies Netball Club to promote career opportunities, build
engagement and advocacy of JE brand
- Primary Engineer Industry Partner and judge for ‘If you were an Engineer,
what would you do?’ competition to engage with schools
- Les Quennevais School engagement promoting JE at careers fair
Annual Report and Accounts 2022 47
Other stakeholders
Progressing stakeholder engagement in line with the UK
Corporate Governance Code 2018 recommendations has
been an area of Board focus this year. It has been identified
as a critical activity to help the organisation navigate an
increasingly dynamic business environment. Ensuring
that stakeholder power, influence and legitimacy is well
understood, and that we respond effectively, is critical to
business success and places the needs of our customers
at the heart of our business.
It has been particularly important in
a year that brought an Island-wide
election, resulting in a new States
Assembly and Council of Ministers.
The year also brought the creation
of the Government’s Carbon Neutral
Roadmap, published in May, and
we continue to seek to influence
its policies and implementation
as part of achieving our Vision
and responsibilities under TCFD
compliance.
As well as actively engaging with
prospective political candidates before
the June 2022 election, we view it as
critical for JE to build understanding
and influence climate policy as we
balance the risks and opportunities
a target of net-zero carbon by 2050
presents.
The cost-of-living crisis has also been
a subject of several stakeholder
engagements with one outcome
being the collaboration between peer
48
organisations and charities – praised
by the Assistant Minister for Social
Security and Chair of Age Concern – to
host shared customer support content
on each other’s websites.
We were also honoured in March to
welcome his Excellency the Lieutenant-
Governor, Air Chief Marshal Sir
Stephen Dalton, to La Collette Power
Station and our Powerhouse retail and
administrative headquarters where we
presented our strategy to help Jersey
achieve net-zero by 2050.
We review key stakeholder
engagements weekly and adjust
communications activity, particularly
PR and social media, accordingly, thus
establishing a direct link between
stakeholder activities and marketing
communications. This has enabled us
to proactively shape opinion and react
to new insights.
JERSEY ELECTRICITYStrategy Examples of our stakeholder engagements and why we held them
STAKEHOLDER
PURPOSE
OUTCOME
Commercial customer: Luxury Hotel
NGO: Citizen’s Advice Bureau (CAB)
Support sustainability ambitions by
investigating viability of converting
to all-electric.
Explain reason for upcoming tariff rise and
how we can assist customers using tools
such as MyJE app.
Feasible: Energy Solutions exploring
new business models to aid funding,
plus EV charging and roof solar.
Energy assessing network capacity.
Better understanding of our pricing
strategies. CAB staff able to explain to
vulnerable clients and make customers
aware of available resources and tools.
GoJ & NGOs Sustainability
Working Group
Communicate our sustainability strategy
and activities.
JE viewed by all parties as a key enabler
of climate action.
Parishes: Comité des Connétables
Build relations and progress Parish Earth
Partnership.
Government of Jersey (GoJ)
Discuss policies and internal opportunities
to decarbonise heating and transport in
line with net-zero 2050.
Jersey Architects Association
Demonstrate how JE can decarbonise
housing and how we can assist architects.
Jersey Farmers & GoJ
Prison Service
Political parties
Cannabis Trade and Services
Advisory Boards
Andium Homes Limited
Presenting our Vision and solar PV
opportunities in agriculture – a new type of
‘solar energy’ farming.
Progress solar PV opportunity,
EV charging, electric catering.
Explaining our Vision to candidates
before election.
Understand trade requirements to
ensure this emerging sector is powered
by low-carbon electricity.
Investigate collaboration on
communication and customer service to
share key information to help vulnerable
customers with rising costs.
Two more parishes purchased trees
with third about to do so with the
intention of planting season 22/23.
We continue to influence GoJ policy
which is being rapidly developed
We are helping GoJ with their own
decarbonisation programme affecting
their fleet and property portfolio.
Good feedback; built better
understanding of our proposition and
some of the design issues.
Good feedback: follow up discussions
planned and new sites coming forward.
Stakeholder collecting information
for desk top study and PV development
on prison site.
Prospective candidates better
informed about energy and how JE
can help facilitate net-zero.
Continue engagement and follow-up
meetings planned.
Hosting shared customer support
content on various websites.
Key stakeholders and the value we create
EMPLOYEES
Our success depends on the
commitment on a dedicated,
engaged and diverse workforce
Number of full-time equivalent
(FTEs) employees
373
ENERGY CUSTOMERS
Consumer demand for low-carbon
electricity drives our business and
strategy
Cost to supply
CAPEX and power procurement
£55.5m
Sheltering customers from significant
increases in prices and price volatility
SHAREHOLDERS AND LENDERS
The confidence of shareholders and
lenders is essential for long-term
investment, and we seek to create
fair returns
Final dividend
£10.80p (4.2%)
GOVERNMENT OF JERSEY (GoJ)
GoJ holds a 62% stake in the Company. Dividends and taxes support
its work for the wider community
NGOs, CHARITIES
We support our communities in many
ways beyond our business activities
Amount paid to GoJ in dividends, taxes and social security
£12.6m
Significant shelter being provided to the local economy removing the need
for GoJ to provide subsidy support c£100-200m/ year run rate of protection
as compared with the UK
Investment in community project
and good causes
£78,700
Annual Report and Accounts 2022 49
Other stakeholders
Community support
We create value for our community in many ways beyond
our core services. As well as creating well-paid employment
opportunities for Islanders and among our supply chain
we support a wide array of local good causes and charities
through corporate sponsorship and the CSR (Corporate
Social Responsibility) activities of our employees. Since the
Government declared a climate emergency in 2018, much
of our efforts have focused on tree planting.
ENVIRONMENT
Tree planting as part of our
climate change strategy
and corporate carbon goals
Mourier Valley
Completed three-year woodland
restoration project at Mourier Valley.
Invited Jersey Water to join a JE
consortium to facilitate a £40,000
project to plant, alongside the
National Trust, Jersey Trees for life
and hundreds of volunteers and
employees almost 4,300 trees over
23.5 vergées adjoining existing ancient
woodland.
Hautlieu Tiny Forest
Partnered Government of Jersey in
funding Jersey’s first carbon-absorbing
50
Tiny Forest at Hautlieu School. Along
with Jersey Trees for Life and students
we planted 600 trees in a tennis-court-
sized plot. The method means the
trees will grow 10 times faster than
traditional planting, generate 100
times more biodiversity and absorb
up to 30 times more carbon.
Clement Parish Earth
Partnership
This year, St Clement became the first
parish to plant for our Parish Earth
Partnership for which we’ve offered
all 12 parishes £5,000 to densely plant
and maintain a small plot with native
trees to increase biodiversity and
aid carbon sequestration over the
long term. Around 40 parishioners
supported by two teams of Jersey
Electricity employees, planted almost
1,000 whips in a large meadow behind
St Clement Parish Church.
Bouley Bay
Our next big planting project is at
Bouley Bay where again in partnership
with the National Trust and Jersey
Trees for life we will be funding and
helping to plant trees over a large
swathe of land on the North coast
gifted to the Trust.
La Pouquelaye Community
Garden
Supporting St Helier Youth and
Community Trust in the creation of
a community garden in the North of
St Helier that will include a forest
school, arboretum, children’s
allotments and sensory garden as part
of our Parish Earth Partnership.
JERSEY ELECTRICITYStrategy HEALTH
Family Nursing and Home Care
We continue our long-term
partnership with Family Nursing and
Home Care. The charity used our
annual Christmas donation to help
fund a huge 3D-effect mural at its
children’s community centre Pip’s
Place which supports over 7,000
children and young people through
many groups and health services
hosted at the centre. We also sponsor
and participate in the annual Colour
Festival which raises funds for a
Children’s Palliative Care Nurse.
Recognising environmental
excellence
We sponsor two awards that
recognise environmental excellence
in the Island. Mother and son Tasha
and Noah Cormack won our seventh
Pride of Jersey Environmentalists
Award for their re-usable party kit
enterprise Many Happy Returns
Jersey which reduces waste and
raises funds for charity. At the Jersey
Construction Council Awards,
Ronez Quarry Extension collected
our Sustainability Award.
Child Accident Prevention
(CAP) Safety In Action Week
Long-term sponsors of this FNHC
initiative with our employees
volunteering to present to over 1,000
schoolchildren on home and electrical
safety at a week-long series of
workshops.
EDUCATION
National Trust Education
Programme
Third year of supporting the Trust’s
full-time Education Officer and her
activities that complement schools’
science curricula and encourage
children to ‘reconnect with nature’.
The programme has also led to the
creation of Power Rangers, a young
environmentalists club providing
training for YUNGA (Young United
Nations Global Alliance) Challenge
Badges.
Primary Engineer
Industry partner for UK initiative led
by Skills Jersey to engage pupils in
the careers related to STEM (science,
technology, engineering and maths)
through a competition ‘If You Were
An Engineer, What Would You Do?’
for which we provide mentoring
engineers and judges.
Annual Report and Accounts 2022 51
Outlook
The global energy crisis and the immense challenges
it presents to power suppliers shows no sign of abating
soon. This will continue to put upward pressure on both
wholesale and retail energy prices. We remain confident
in our strategies for meeting these challenges and
achieving our Vision.
Our current supply framework
agreement with EDF in France
runs until the end of 2027 and our
electricity purchases are materially
hedged for 2023 and 2024 and for
a portion of 2025-2027. Whilst this
is presently affording the Island
significant protection from wholesale
price volatility, it cannot protect
completely if wholesale prices remain
at present levels. The war in Ukraine
and consequential energy crisis
show no sign of abating and, on this
basis, are likely to flow into higher
retail energy prices in Jersey. Jersey
Electricity will continue its efforts to
be as efficient as possible, restrain
any price increases as well as help
consumers mitigate the other driver
of bills, consumption, which we believe
presents a significant cost saving
opportunity for many households
in Jersey.
Secure long-term future
Despite the short to medium term
challenges, the Company and the
Island remain well placed to do what
is necessary to deliver a sustainable
and secure long-term future. The
current vulnerability in European
energy systems and Europe’s
continued reliance on imported
fossil fuels, if anything, further
emphasise the importance of our
strategy and its focus on sustainability
and the continued exploration
and development of cost effective,
indigenous renewables. Supplying
clean energy in an affordable and
secure way is as important as ever in
the fight against climate change and
we are well placed to play a key role
in helping Jersey achieve its net-zero
ambitions.
Whilst we have confidence in our
supply chain and continued access to
large volumes of low-carbon nuclear
and hydro power from Europe, and we
believe our smart-enabled electricity
system is very well invested for the
future, we will continue to innovate
with new products and services to
help Islanders switch from fossil fuel
to low-carbon electricity in the high
carbon emitting areas of heating and
transport. These bring opportunities
for growth for the Company and for
local businesses and partners.
Optimising investments
Driving scale across our network
should enable Jersey to better utilise
its assets and this should lead to
lower prices than otherwise would be
the case. We know what additional
investment is needed in the network
to meet the increase in both peak
demand and annual consumption
that the energy transition should
bring. New technologies and the
digitalisation of our business are
enabling us to optimise those
investments and create other
efficiencies throughout Jersey’s energy
system, including the provision of new
value-adding services for consumers.
The publication of the Government’s
Carbon Neutral Roadmap in May 2022
and the election of a new Government
in June with a conviction to pursue
net-zero Jersey by 2050, possibly
earlier, coupled with what we hope will
be regulatory stability and certainty,
should give us confidence to make
these investments at our target
returns. There is a significant amount
of work to be done for the Island to get
onto a trajectory of net-zero by 2050
52
JERSEY ELECTRICITYStrategy The current vulnerability in European
energy systems and Europe’s continued
reliance on imported fossil fuels,
if anything, further emphasise the
importance of our strategy
but the first £23m of Government
funding from the Climate Emergency
Fund is secure for the first four years
of the Roadmap and we are actively
involved in supporting Government
to develop workable initiatives in the
heating and transport sectors, the two
largest carbon emitting sectors.
Energy sovereignty
The Carbon Neutral Roadmap and the
Bridging Island Plan provide support
for more on-Island renewables, and
the global energy crisis has renewed
the Island’s focus on the issue of
energy sovereignty. We will continue
to enable and invest in utility and
commercial scale solar PV – which
is the most viable of the renewable
technologies albeit requiring large
land areas – while also accelerating
our research into offshore wind
which is reducing significantly in cost
and which we believe now enjoys
significant public support. Both the
Roadmap and Bridging Island Plan
identify an offshore wind farm as
being of potential strategic value
to the Island. Not only would such
a project provide greater energy
independence, but the scale of local
resources would also provide several
times the Island’s need, providing a
commercial opportunity for Jersey to
become a net exporter of energy, with
the consequential licensing income
stream for Jersey. We believe that
Jersey Electricity has a critical enabling
role to play with such a development.
Building the right skills and experience
within our organisation, and
developing a modern, progressive
culture is more important than ever.
We will continue to invest in a diverse
workforce to ensure we have the
capacity and capabilities to execute
our strategies for achieving net-zero,
seize the opportunities it presents and
secure a prosperous future for the
Company and our community.
Annual Report and Accounts 2022 53
Financial Review
Group Financial Results
Key Financial Information
Revenue
Profit before tax
Earnings per share
Dividend paid per share
Final proposed dividend per share
Net cash
2022
£117.4m
£10.6m
27.17p
17.80p
10.80p
£17.4m
2021
£118.6m
£19.1m
52.73p
16.90p
10.20p
£13.1m
Group revenue for the year to 30
September 2022 at £117.4m was 1%
lower than in the previous financial
year. Energy revenues at £89.7m were
marginally lower than the £89.8m
achieved in 2021. Lower unit sales
of electricity were linked to a milder
winter and the positive uplift from
increased home working, due to
COVID-19, in the previous year.
This was offset by a 4% tariff rise
from January 2022 and a 5% rise
from 1 July 2022. Revenue in the
Powerhouse retail business decreased
6% from £19.8m in 2021 to £18.7m.
Revenue in the Property business at
£2.3m was at the same level as last
year. Revenue from JEBS, our building
services business, remained at the
same level as 2021 at £3.4m. Revenue
in our other businesses at £3.3m, was
in line with the prior year.
Cost of sales at £77.2m was £3.1m
higher than last year with an increase
in wholesale electricity prices offset
by the lower revenue level in our
Powerhouse Retail business.
Operating expenses at £29.3m were
£0.7m lower than last year. The fall is
largely due to £1.8m incurred in the
previous financial year for a non-
cash ex-gratia award for pensions
in service, in our defined benefits
pension offset by the increased spend
in systems and people, associated
with the de-carbonisation vision for
the Island.
Profit before tax for the year to 30
September 2022 was £10.6m against
£19.1m in 2021. However, if the
non-cash upside from revaluation of
investment properties is excluded
in both years the underlying year-
on-year profit before tax was £9.6m
in 2022 against £13.0m in 2021, a
decrease of 26%.
Profit in our Energy business,
at £7.5m, was below the £10.7m
achieved in 2021, largely due to lower
unit sales volumes. Our target return
on assets* employed continues to be
in the 6%-7% range over the long-
term and was 4.2% in 2022 against
5.9% in 2021, but 6.2% on a rolling
5-year basis. Unit sales volumes
decreased by 4% from 639m to 613m
kilowatt hours, due to milder than
normal weather, combined with
the previous year having benefited
from home-working linked to the
pandemic. In the financial year we
imported 95.3% of our requirements
from France (2021: 95.2%) and
generated 0.3% of our electricity
on-Island from our solar and diesel
plant (2021: 0.4%). The remaining
4.4% (2021: 4.4%) of our electricity
was purchased from the local Energy
from Waste plant. A customer tariff
rise of 4% was instigated on 1 January
2022 and a subsequent 5% increase
took place in July 2022 and notice was
given that a further 5% rise would
take place on 1 January 2023.
The £1.4m profit in our Property
division, excluding the impact of
investment property revaluation, was
at the same level as last year. Our
investment property portfolio moved
up in value by £1.0m to £28.8m,
based on advice from our external
consultants, who review the position
annually. This increase compared to
£6.1m in the 2020/21 financial year
was 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 increase in this financial
year was due to continued buoyant
market conditions in the residential
sector.
Our Powerhouse retail business saw
profits fall 23% from £1.5m to £1.2m.
However, this is in the context that in
the previous financial year profits rose
by 30% by when COVID-19 continued
to influence the behaviours, and
spending patterns of local customers,
for example, due to less travel taking
place over that year.
JEBS, our building services unit,
produced a profit of £0.3m, being
marginally ahead of 2021.
Our other business units (Jersey
Energy, Jendev, Jersey Deep Freeze
and fibre optic lease rentals)
produced profits of £0.5m being
£0.1m lower than last year.
The net interest cost in 2022 was
£1.3m being £0.1m lower than 2021
due to a higher level of interest
received on deposits. The taxation
charge at £2.1m was lower than the
previous year, due to lower profits.
Group basic and diluted earnings
per share, at 27.17p, compared to
52.73p in 2021 due to decreased
profitability.
Dividends paid in the year, net of
tax, rose by 5%, from 16.90p in 2021
to 17.80p in 2022. The proposed final
dividend for this year is 10.80p, a 6%
rise on the previous year. Dividend
cover, at 1.6 times, was lower than
the comparable 3.1 times in 2021 due
mainly to the large non-cash increase
in the revaluation of investment
properties in 2021.
* Target return on assets could be viewed as an alternative performance measure and is defined as Energy operating profit as disclosed in note 3 (adjusted for IAS 19
pension charge net of cash costs) as a proportion of Energy net book value assets less capital contributions from customers, included within note 11.
54
JERSEY ELECTRICITYStrategy
Ordinary Dividends
Dividend paid
- final for previous year
- interim for current year
Dividend proposed
- final for current year
2022
10.20p
7.60p
10.80p
2021
9.70p
7.20p
10.20p
this financial year was 1.18€/£ against
1.15€/£ during the 2021 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 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 2022 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
Net cash flows from operating
activities at £21.2m was £1.2m lower
than in 2021. Investing activities,
at £11.1m was £1.9m higher than
£9.2m last year. Dividends paid were
£5.5m compared to £5.3m in 2021.
The resultant position was that net
cash at the year-end was £17.4m,
being £30.0m of borrowings offset by
£47.4m of cash and cash equivalents,
which was £4.3m more than last year.
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 1.13 €/£. The
average applicable spot rate during
Cash Flows
Summary cash flow data
Net cash inflow from operating activities
2022
£21.2m
Capital expenditure and financial investment
£(11.3)m
Deposit interest received
Repayment of lease liabilities
Dividends
Increase in cash
£0.2m
£(0.2)m
£(5.5)m
£4.3m
2021
£22.4m
£(9.3)m
£0.1m
£(0.3)m
£(5.3)m
£7.6m
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.
Last year we intimated that we had
seen unprecedented volatility in
energy markets during 2021, which
has resulted in many UK suppliers
going out of business and indicated
this was likely to worsen. This
prediction crystallised and as an
example, in the UK, only Government
intervention averted a proposed
80% year-on-year increase in energy
prices. Prices still materially rose for
consumers and currently , even with a
subsidy regime in the UK, the average
domestic customer in Jersey is paying
less than half the price they would
do in the UK for their electricity. 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
May 2022 that a 5% tariff rise would
be instigated from 1 July 2022, and
flagged a further planned rise of the
same quantum from 1 January 2023,
to allow our customers to plan ahead.
Although any such rises are difficult
they are much lower than increases
being seen elsewhere. Even after this
rise, we will continue to benchmark
very favourably against other
jurisdictions.
Annual Report and Accounts 2022 55
Financial Review continued
Defined benefit pension
scheme arrangements
As at 30 September 2022 the scheme
surplus, under IAS 19 “Employee
Benefits”, rose to £21.1m, net of
deferred tax, compared with a surplus
of £15.0m at 30 September 2021.
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 34% at the last
year end, to 13% at 30 September
2022. The fall in the proportion of
LDI/UK Gilts was due to a matching
to the fall in liabilities that took place
in September 2022. During October
2022, a combination of portfolio
re-balancing and market recovery
resulted in the LDI proportion
returning to around 30%.
The discount rate assumption, which
heavily influences the calculation of
liabilities, materially rose from 2.1%
in 2021 to 5.2% in 2022 to reflect
sentiments in prevailing financial
markets, which materially moved in
September 2022 due to UK political
decisions that brought turbulence
to trading in UK Gilts. This resulted
in liabilities decreasing 39% from
£142.3m to £86.1m since the last year-
end and assets fell 28% from £161.1m
to £112.5m in the same period.
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 or 0.5% higher than the
5.2% assumed under IAS 19 for 2022,
the liabilities would have been around
£6m higher or lower respectively.
56
Dividend paid per ordinary share - 2007 to 2022
20
18
16
14
12
10
8
6
4
2
0
e
r
a
h
s
r
e
p
e
c
n
e
p
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 2022
The most recent triennial actuarial
valuation, as at 31 December 2021
showed a surplus of £17.1m. Unlike
most UK schemes, the Jersey
Electricity Pension Scheme is not
funded to pay mandatory annual rises
on retirement. The Pension Scheme
Trustees, in conjunction with the
Company, agreed to the granting of
a 3% rise to pensions in service, and
the retention of the current Company
funding rate of 20.6% for the next 3
years. 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 2024.
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 5.4m (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 16.90p net of
tax to 17.80p. The proposed final
dividend for 2022, at 10.80p, is a 6%
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. We are
currently seeing a surge in the local
RPI in Jersey, which was at a rate
of 7.9% at 30 June and 10.4% at 30
September 2022 but this is predicted
to fall in future years to more
normalised levels albeit 2023 is likely
to be at similar levels to 2022. The
chart above shows the evolution of
the ordinary dividend payments over
the last 15 years (excluding additional
special dividends) that have risen
from 5.85p to 17.80p.
The share price at 30 September
2022 was £5.20 against £5.93 at
the 2021 year end. This gives an
implied market capitalisation of
£159m at 30 September 2022
compared with a balance sheet net
assets position of around £239m.
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
JERSEY ELECTRICITYStrategy
‘A’ Ordinary share price movements 2007 - 2022
e
r
a
h
s
r
e
p
£
6.5
6.0
5.5
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021 2022
improve our longer-term liquidity.
The above chart shows the trending
of our listed share price over the last
15 years that has risen from £2.31 to
£5.20.
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 £12.6m
(2021: £12.1m).
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-Executive Directors 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
September 2022. This included an
assessment of how supply security
might be impacted by the war in
Ukraine and the impact of Russian gas
imports into Europe.
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
Direct cash return to the Government of Jersey
Ordinary dividend
Goods and Services Tax (GST)
Corporation tax
Social Security - employers contribution
2022
£3.4m
£5.1m
£3.0m
£1.1m
2021
£3.2m
£5.2m
£2.7m
£1.0m
£12.6m
£12.1m
are considered. We have a strong
balance sheet with net assets of
around £239m 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.
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 2027.
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.
Annual Report and Accounts 2022 57
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 the 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.
58
JERSEY ELECTRICITYStrategy 3) Three lines model
Jersey Electricity has adopted the ‘Three
lines model’ to systematically and
organisationally embed risk monitoring
and manage internal controls. The
model enhances the understanding
of risk management and control by
clarifying roles and duties. The model
distinguishes among the three groups
(or lines) involved in effective risk
management:
• functions that own and manage risks
• functions that oversee risk
management and the risk
management framework.
• functions that provide independent
assurance.
KEY
The arrows illustrate the reporting lines, direction and
collaboration for each core component of this framework.
Accountability & reporting for evaluations
Delegation, direction & oversite
Collaboration & communication
External assurance reporting
JE Board
Approves the Risk Management framework, Risk Appetite and Risk principles.
Audit and Risk Committe (ARC)
Governs and obtains assurance that risks have been identified,
evaluated, addressed (mitigated/treated) and monitored.
Executive Leadership Team (ELT)
• Defines and recommends the risk appetite framework
and principles to the Board.
• Are exemplars of Risk Management.
• Identifies principal and emerging risks.
• Responds and monitors company risks.
ELT Sponsor
• Established and owns
Risk Management policy
and processes.
• Provides updates to the ELT,
ARC and Board.
First Line
• Senior Leadership Team /
Operational Managers define
processes to identify, measure
and control our principal risks.
• Identify and develop
mitigation action plans.
• Update Risk assessments /
registers - Internal controls
embedded within processes
and operating systems.
Second Line
The Risk Management and
Compliance functions ensure
the first line of defense is
properly designed in place,
and operating as intended
HS&E Team, Information
Security, Data Protection.
Third Line
Internal Audit function
provides the ARC and ELT
with independent and
objective assurance regarding
effectiveness of the controls
and risk management
processes.
External Audit
- External third
party assurance.
• Provides the
highest form
of impartial
assurance.
Three lines model
Annual Report and Accounts 2022 59
Group Risk Management continued
4) Risk Management Framework
Our risk management programme
clearly defines roles and responsibilities
and sets out a consistent end-to-end
process for identifying and managing
risks, as illustrated in the diagram
below.
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.
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.
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.
60
JERSEY ELECTRICITYStrategy 6) Our principal risks
and uncertainties
The following tables sets 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.
Risk profiles change key
< Increasing
< Decreasing
<> Stable
Vision Key
Enable life’s
essentials and
inspire a zero-
carbon future
Accelerate
digital
enhancement
and innovation
Ensure the
customer is
at the heart of
the business
Ensure robust
energy
sourcing and
supply
Future proof
the Energy
business
model
Position JE at
the forefront of
solar PV and EV
charging market
Grow energy
market share
Employer
of Choice
Risk Category: Strategic Risks
Energy market share growth
Strategy and disruptive technology
Climate change
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.
Description: Climate change (and failure to
take climate action) impacts our business
model, capacity for growth, and could
result in public pressure for governments to
introduce new policies, laws & regulations.
Risk Owner:
Director of Commercial Services
Movement: <> Stable
Risk Appetite: Moderate
Risk Owner:
Operations Director
Movement: <> Stable
Risk Appetite: Moderate
Risk Owner:
Operations Director
Movement: < Increasing
Risk Appetite: Cautious
Our Vision:
Our Vision:
Our Vision:
Key mitigating actions
Key mitigating actions
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.
• Opportunities and challenges related
to growth are a major area of focus
throughout the business, with advances in
technology reviewed and discussed.
• JE has a well-invested low carbon
electricity system that can facilitate a
zero-carbon future.
• The Sustainability Committee, made up of
representatives across all departments,
work together to oversee JE’s sustainability
program for company wide initiatives.
• Refreshed vision includes key strategic
workstreams which address innovation
and growth opportunities.
• Macro-economic factors that could
• Integrating the energy transition and
potentially impact the strategy are tracked
and regularly reviewed by ELT.
• Growth opportunities are reviewed in line
with our risk appetite, company values,
business model and culture.
climate concerns into processes, resulting
in reviews / rethinks of our supply chain,
purchases and the way we conduct our
business activities.
• Committed to government environmental
objectives by providing renewable energy
and charging outlets for EVs.
• Aligned reporting with the
recommendations of the Taskforce on
Climate Related Financial Disclosures
(TCFD) which can be found on page 66.
Annual Report and Accounts 2022 61
• Numerous workstreams in place to
develop low carbon products and
financing options, enabling growth
beyond 2022.
• A dedicated team working on low carbon
/ renewable initiatives - including EV, solar
power and other renewable options.
Group Risk Management continued
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.
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.
Risk Owner: Finance Director
Risk Owner: Finance Director
Principal Risk Trend: < Increasing
Principal Risk Trend: < Increasing
Risk Appetite: Cautious
Risk Appetite: Moderate
Risk Owner: Finance Director
Principal Risk Trend: <> Stable
Risk Appetite: Moderate
Our Vision:
Our Vision:
Our Vision:
Key mitigating actions
Key mitigating actions
Key mitigating actions
• Strategic objectives in place to ensure
• Power Purchase contract with EDF in place
we balance between being the key service
provider on an 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 Service, Customer Minutes Lost,
CO2 emissions, Lost Time Accidents).
• Continuous monitoring of political
and legislative developments
(e.g., the Government’s Energy Plan).
to 31 December 2027.
• Hedging and Treasury policies are
reviewed annually and approved by
the Board.
• Financial risks and hedging positions are
reviewed regularly, with comprehensive
status updates provided at each Board
meeting.
• Daily monitoring of power price futures
undertaken and material movements
reported to management, the ARC and
Board.
• The goal, where possible, is to instigate
tariff rises that are similar in scale to Jersey
RPI levels.
• The Board monitors the financial position
of the Scheme and the potential impact
that it may be 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 is performed that
formally reports on performance.
62
JERSEY ELECTRICITYStrategy Risk Category: Operational Risks
Reliable and secure supply
of energy
Health, safety & environment
People and culture
Description: Unable to maintain operations
and continuity of electricity supply, leading
to frequent disruption to supply, including
an island wide power outage.
Description: A health, safety or
environmental incident, leading to a serious
injury, death, hazardous event or long-term
damage to the eco-system.
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.
Risk Owner: Operations Director
Movement: <> Stable
Risk Appetite: Cautious
Risk Owner: Operations Director
Movement: <> Stable
Risk Appetite: Averse
Risk Owner: Human Resources Director
Movement: <> Stable
Risk Appetite: Moderate
Our Vision:
Our Vision:
Our Vision:
Key mitigating actions
Key mitigating actions
Key mitigating actions
• Robust processes and procedures in
• A proactive safety and environmental
culture nurtured throughout the
organisation which is supported by safety
representatives, programmes of site
inspections and regular training.
• Performance measures are explicitly
presented as a separate agenda item at
each Board meeting.
• A 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.
place to prevent unplanned outages and
interruptions to services.
• Three subsea cables to France provide
resiliency with regards supply importation
cables.
• 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 testing under
various scenario exercises.
• The completion of our smart metering
rollout has enhanced metering data,
enabling improved analytic insights to
better manage load.
• 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 and inclusion 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.
• Code of Conduct, Speak Up polices and
other HR policies communicate expected
behaviours of all our people.
• Increased emphasis on mental health,
wellness programs and improving ways
of working.
Annual Report and Accounts 2022 63
Group Risk Management continued
Risk Category: Technological Risks
Data loss or regulatory breach
Cyber threat
and information security
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: Director of Technology
Movement: <> Stable
Risk Appetite: Averse
Risk Owner: Director of Technology
Movement: < Increasing
Risk Appetite: Averse
Our Vision:
Our Vision:
Key mitigating actions
Key mitigating actions
• Appointment of a 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.
• On-going data protection training as
we 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.
• 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
activity on the corporate network.
• Testing of cyber security including system
penetration testing and internal phishing
training exercises.
• On-going cyber awareness training across
the Group.
• Core applications are only accessible
through a secure portal that require
multi factor authentications.
64
JERSEY ELECTRICITYStrategy 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 may, in time, pose
a threat to the Group’s business model
and strategic objectives.
Emerging risk
Owner
Risk Description
Action plans
Climate Action
Failure
Operations
Director
Probability of extreme weather
(such as storms and heatwaves)
impacting on our business model
and capacity for growth in demand,
and public pressure for governments
to respond to climate change may
result in the introduction of regulatory
obligations (new or strengthened
carbon neutrality commitments).
• Flood surveys to identify
substations at risk undertaken
regularly.
• Replacement of overhead cables
with under head cables (a small
proportion of the network is
overhead cables).
• Alternative and on-island capability
to generate energy.
• Monitoring weather patterns.
• Enhanced asset management
systems (WAMS).
Finance Director
Severe
Commodity
Shocks / Supply
Chain issues.
Although Jersey is not in the EU, the
UK decision to exit the EU has created
unknown or unforeseen consequences
which may impact group objectives.
• We maintain constant dialogue with
Government of Jersey, key suppliers
and others to ensure we are well
informed of any developments.
Europe energy
crisis and Russia/
Ukraine conflict
Operations
Director
The world is experiencing the first
truly global energy crisis in history,
with the situation especially perilous in
Europe. There are some concerns over
disruption to supply from France this
coming winter.
Disruptive
technology
in the energy
sector
Operations
Director
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.
• Uncertainty remains with
post Brexit and supply chain
arrangements; therefore we now
hold a higher stock level of items
felt essential to our business units.
• Business continuity plans for
winter operations have been
formally established.
• Numerous scenario modelling and
tested mitigations for technical
failures to the interconnection
cables and disruption to supply.
• Mitigation plans to manage
customer demand and local
emergency generation.
• 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.
Annual Report and Accounts 2022 65
TCFD Disclosures
Compliance Statement
This is the first year that Jersey Electricity has reported against the 11 TCFD recommended climate-related financial
disclosures. As we align our approach to the meet these requirements, there are four areas where we are not yet fully
compliant and require more time for us to fully consider. In line with the current Listing Rules requirements (as referred to in
Listing Rule 9.8.6R(8)), the table below is a summary of management’s assessment of Jersey Electricity’s degree of compliance.
TCFD AREA
Recommended Disclosure
Compliance Further Work
(for partial / non-compliance)
Governance
Disclose the organisation’s governance around climate-related risks and opportunities.
a. Describe the Board’s oversight of
climate-related risks and opportunities.
b. Describe management’s role in assessing
and managing climate-related risks and
opportunities.
Full
Compliance
Partial
Compliance
Clarifying the link between executive
remuneration and climate change
risk/opportunities within the
corporate scorecard.
Strategy
Disclose the actual and potential impacts of climate-related risks and opportunities on the
organisation’s businesses, strategy, and financial planning where such information is material.
a. Describe the climate-related risks and
opportunities the organisation has identified
over the short, medium, and long term.
b. Describe the impact of climate-related risks and
opportunities on the organisation’s businesses,
strategy, and financial planning.
c. Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C
or lower scenario.
Full
Compliance
Full
Compliance
Not yet
compliant
Within the next 12 months develop
scenario analysis capabilities so the
business can better understand and
act on the implications of climate-
related risks and opportunities.
Risk
Management
Disclose the organisation’s governance around climate-related risks and opportunities.
a. Describe the organisation’s processes for
identifying and assessing climate-related risks.
b. Describe the organisation’s processes for
managing climate-related risks.
c. Describe how processes for identifying, assessing
and managing climate-related risks are integrated
into the organisation’s overall risk management.
Full
Compliance
Full
Compliance
Full
Compliance
Metrics and
Targets
Disclose the metrics and targets used to assess and manage relevant climate-related risks
and opportunities where such information is material.
a. Disclose the metrics used by the organisation
to assess climate-related risks and opportunities
in line with its strategy and risk management
process.
b. Disclose Scope 1, Scope 2 and, if appropriate,
Scope 3 greenhouse gas (GHG) emissions and
the related risks.
c. Describe the targets used by the organisation to
manage climate-related risks and opportunities
and performance against targets.
Full
Compliance
Partial
Compliance
Not yet
compliant
Collection of data to enable the
accurate reporting and reduction
of Scope 3 emissions.
Feasibility study to be undertaken
next year to identify whether Jersey
Electricity should adopt Science Based
Targets.
66
JERSEY ELECTRICITYStrategy Governance
Board
• The Board has set out a Vision and Strategy putting net-zero at the centre.
• The Board is responsible for climate-related risks and opportunities and monitors the implementation and performance
of the zero-carbon strategy. The Board oversees, considers and reviews the Company’s actions and responses to climate
change risks, ensuring the response is proportionate to the materiality of the risk impacting Jersey Electricity.
• The Board has experience with climate-related risks and carbon neutrality. Furthermore, the Board’s knowledge
on climate-related matters continues to be enhanced through regular interactions with management, regulators
and attendance at seminars and conferences on climate change and net-zero.
• At each of the Board meetings held during the financial year, the journey to zero-carbon, carbon reduction projects,
climate change and actions taken to enable and inspire net zero by 2050 were standing items discussed by the Board.
• The Board rigorously challenged the Executive Leadership Team on the progress on strategic objectives including
reduction of carbon emissions, growing renewables and providing digital solutions to enable customers save energy.
Through regular progress reviews, the Board considered the allocation of resourcing and on-going operational planning.
Audit and Risk Committee (ARC)
• The Board has delegated to the ARC the responsibility for overseeing the climate-related principal and emerging risks,
including the management and mitigation of climate-related risks and opportunities that affect strategic decisions
made by the Board.
• The ARC regularly met during the year (four times in FY2022) to discuss and review the climate related risks and
opportunities. This included monitoring compliance with, and progress on, climate change reporting in the Annual
Report & Accounts.
Chief Executive and Executive Leadership Team
• The Chief Executive is accountable for the Group’s climate action, including driving our net zero vision and the
achievement of metrics and targets.
• The Operations Director is responsible for sustainability and responding to the risks associated with climate change.
• The Operations Director, along with the Finance Director (ELT Risk Sponsor) regularly updates the Group Principal
Risk Register with changes to the environment and climate related risks on a bi-monthly basis. Material updates
to climate-related risks and opportunities are presented internally at the monthly Business / Finance Management
meetings and at each Audit and Risk Committee.
• Management is responsible for managing the day-to-day operations and initiatives established to enable the
zero-carbon future vision. Management monitors the climate change metrics and targets and tracks the progress
on a monthly basis.
Environment and Sustainability Committee
• The Operations Director chairs the Environment and Sustainability Committee which was formally established
in November 2021.
• The Committee is not a sub-committee of the Board, however regular updates are provided to the Board on the
progress of the Committee activities.
• The Committee is made up of 16 representatives across all departments who work together to implement and
communicate the Group’s Environment and sustainability programmes and other climate change actions that are
material to the Group.
Partial compliance with TCFD recommendation explanation: Executive Remuneration
Although carbon-related metrics in the corporate scorecard have been in place for several years, the direct impact
on executive remuneration has yet to be formally established and approved by the Remuneration Committee.
Annual Report and Accounts 2022 67
TCFD Disclosures continued
Strategy
Jersey Electricity has a well-invested low carbon electricity system that is well positioned to facilitate a zero-carbon future.
Further investment is planned to meet the expected increase in electricity demand from the Government of Jersey’s carbon
neutrality ambitions. Our strategy for climate action focuses on eight areas: helping customers save energy, digitalisation,
supporting EVs, more renewables, low carbon heating, carbon capture, tree planting and offsetting.
i l ity sup
pli
e
r
Electric u t
Our approach
I
n
t
e
r
e
g
r
ated ene r g y p artn
Helping customers
save energy
Investing in smarter
living and innovative
heating solutions
Investing in data-led
technology
Exploring carbon
capture and storage
from the Energy from
Waste plant
Supporting
widespread
use of Electric
Vehicles
Investing in local
carbon sequestration
projects including tree
planting
Developing partnerships
to pursue solar
and offshore wind
Using offsetting
through credible and
auditable schemes
68
JERSEY ELECTRICITYStrategy Our work to date
We have been working hard over the last 15 years to reduce our own emissions and help Jersey to do the same.
1. Grid
• Two interconnectors between
Jersey and France.
• Substantially future proofed
2. Energy Solutions
• Doubled rate of fuel switching
over last 5 years from fossil
fuels to electric.
‘zero-carbon’ infrastructure built.
• Low carbon electricity
• Long term contract to 2027
consisting of 2/3 nuclear and 1/3
certified renewable hydropower.
consumption per domestic
customer twice that of UK.
• Energy efficiency propositions
and solutions developed.
4. e-mobility
• Island-wide Evolve public EV charging
network in operation.
• Consumer app interface in development.
3. Renewables
• 5 commercial-scale solar arrays
installed and in service, including
the largest in the Channel
Islands.
• Economic studies completed on
key renewables project.
• 1/3 certified renewable
hydropower under long-term
contract.
5. Smart home
• Smart Meter network fully
deployed and metering network
fully digitised, circa 5 years
ahead of UK.
6. Community
• Le Mourier Valley
tree planting - largest
reforestation scheme
in Jersey.
• Smarter Living concept store
• Parish community planting
launched in 2018 within
Powerhouse.je retail store.
• Energy consumption dashboard
under development for use with
business customers.
• Residential customer app released
in 2021 to help customers save
energy and access bills easily.
scheme - 12 schemes
in development.
• “Tiny Forest” planting
scheme - innovative
urban carbon sequestration
project.
The actual and potential impacts
of climate change presents Jersey
Electricity with both risks and
opportunities on its journey to achieve
its ambitious net-zero carbon strategy.
These risks and opportunities, along
with a summary of the work we are
doing to address them are presented in
the next table. Short, medium and long-
term timeframes are defined as follows:
Time frame
Estimate Timing
Description
Short-term
Up to end 2024
Medium-term
2024 to end 2026
Long-term
2026 and beyond
Actions are already underway or
identified as quick wins.
Project or initiatives are in scoping
phase or early drafts.
These actions require more time,
information and resources to achieve
net-zero carbon vision.
Annual Report and Accounts 2022 69
TCFD Disclosures continued
Risk/Opportunity Type
Description
Our strategic response
Physical – extreme
weather
Acute weather events and chronic changes to
climate could impact operations, for example:
• Flood surveys to identify substations
at risk undertaken regularly.
(Short to medium-term)
• Rising sea levels and flooding could
significantly damage assets and equipment.
• Strong winds could damage power lines,
• Replacement of overhead cables with
under head cables (a small proportion
of the network is overhead cables).
or delay construction projects.
• Alternative and on-island capability to
• Lack of water may threaten nuclear plants
by disrupting the functioning of critical
equipment and processes.
• Changes in regional weather patterns
threaten to impact renewables, for
example an increase in cloudiness
affecting our solar technologies.
These risks are those associated with the
transition to a low-carbon economy. Changing
policies, regulations and legislation as
measures to address climate change could
result in an increase in operating costs due to,
for example, enhanced emissions reporting.
Fluctuations in unit sales of electricity due
to higher demand for electricity caused by
subsidies to switch to low carbon heating,
adoption of electrical vehicles, energy efficient
products, requirement for energy efficient
homes (including building obligations etc).
Fluctuations in unit sales of electricity due
to higher demand for electricity caused by
subsidies to switch to low carbon heating,
adoption of electrical vehicles, energy efficient
products, requirement for energy efficient
homes (including building obligations etc).
Transitional
(Medium to long-term)
Unknown changes
in demand
(Medium to long-term)
Opportunities
(Short to medium-term)
generate energy.
• Monitoring weather patterns.
• Enhanced asset management systems (EAMS).
• Working with and supporting the
decarbonisation unit within the Government.
• Future planning and scenario analysis.
• Transport – provide a network of reliable
public charging stations for electrical vehicles.
• Heating efficiencies – support low-carbon
heating systems with financing options to
meet our customer needs.
• Low-carbon lifestyles – help our customers
reduce emissions and become energy efficient
through digital solutions, including enhancing
current technology to improve insights such
as Smart Meters, My JE App etc.
• Partnering – collaborate with the commercial
industry to find solutions to help them reduce
emissions and waste.
• Renewables – further establishment of solar
PV across the island and investing into wind.
Non-compliance with TCFD recommendation explanation: Climate-related scenario analysis
The table above presents the results of a high-level quantitative assessment for climate-change risks and opportunities
impacting Jersey Electricity. These assessments describe the gross impact of the risk or opportunity before any action
has been taken, alongside Jersey Electricity’s strategic response currently in place or in progress. However, qualitative
assessments, taking into consideration different climate-related scenarios, including a 2°C or lower scenario has not yet
been undertaken.
We are considering how best to perform specific risk assessments that can model the likelihood and impact of generally
accepted climate related risks to better understand and act on the implications of climate-related risks and opportunities
for the Group and our customers. This may include: the effectiveness of our controls to mitigate climate related risks,
including the likelihood over time (2025 and 2050) and the financial impact (NPV) on the business.
70
JERSEY ELECTRICITYStrategy Risk Management
The Board retains overall accountability and responsibility for the Group’s risk management and internal control systems
including identifying and assessing climate-related risks, which pose physical and transition risks to the business, as well as
providing opportunities to achieve strategic objectives and net-zero Vision.
Climate-related risks are incorporated within our Group risk management framework and, are therefore identified,
assessed and managed in the same way as any other risk (please refer the Group Risk Management Framework p 58-65).
Climate Change is considered to be a principal risk at Jersey Electricity, however, as there is insufficient information to
understand the likely scale, impact or velocity of some of the physical impacts of the climate change risk, coupled with
unknown regulatory obligations that may occur in the longer-term, we also consider climate change as an emerging risk.
To manage our physical climate risks effectively, Jersey Electricity tracks weather patterns and significant weather events,
to better understand how they affect us operationally and so we can put into place appropriate controls to address those
risks.
We monitor several sources of data to effectively manage transitional risks including; guidance and policies from the
Government of Jersey regarding the Carbon Neutral Roadmap, commitments by the UK and other countries to address
climate change, energy pricing (including gas and oil) and market pricing and availability of electric vehicles.
Furthermore, climate-related risks are key considerations when designing the internal audit plan. As with all audits, the
findings are presented to the Audit and Risk Committee, which has been delegated the responsibility of assessing the
effectiveness of risk management framework by the Board.
Climate-related risks are incorporated
within our Group risk management
framework and, are therefore identified,
assessed and managed in the same way
as any other risk
Annual Report and Accounts 2022 71
TCFD Disclosures continued
Metrics and Targets
At Jersey Electricity, we generate carbon emissions across Scope 1 (direct emissions from our operational activities), Scope
2 (indirect emissions from our purchase of electricity) and Scope 3 (other indirect emissions from activities and sources
outside of our ownership or control). We have developed capabilities to measure our carbon footprint both related to own
operations and indirect emissions, presented below:
Our Carbon Footprint
Scope 1
Direct emissions:
gCO2/kWh
2.234
Scope 2
Associated emissions:
gCO2/kWh
0.780
Source
Gas Oil
Fleet Fuel Petrol
Fleet Fuel Diesel
SF6
Refrigerant gases
Solar
gCO2/kWh
1.292
0.180
0.336
0.278
0.126
0.022
Importation transportation losses
0.043
On-Island distribution losses
0.737
Scope 3
Indirect emissions:
Importation EDF
gCO2/kWh
19.187
Importation EFW
4.526
14.661
Gross Emissions (FY2022)
22.201
Scope 1 direct emissions -
are greenhouse gas emmissions
from sources that are owned or
controlled by Jersey Electricity.
Scope 2 emissions -
are greenhouse gas emissions
associated with distribution
losses.
Scope 3 indirect emissions -
are associated with the
purchase of electricity from
outside Jersey Electricity:
• EDF
• Government Energy from
Waste (EFW) Incinerator
• Goods we consume, or assets
we invest in, made in other
countries and not within direct
control
72
JERSEY ELECTRICITYStrategy
Metrics
Jersey Electricity Grid (blended) gCo2/kWh
Electricity from low-carbon sources (%)
Progress Tracking
FY22
22.2g
95.3%
FY21
22.7g
95.2%
FY20
24.5g
94.7%
JE on-island solar generated (kWh)
903,699
855,898
143,667
Scope 1 - CO2 emissions
Scope 2 – CO2 emissions
Scope 3 – CO2 emissions
2.22 gCO2/kWh
2.56 gCO2/kWh
1.98 gCO2/kWh
0.78 gCO2/kWh
0.84 gCO2/kWh
0.83 gCO2/kWh
19.19 gCO2/kWh
19.31 gCO2/kWh
21.69 gCO2/kWh
As part of the Sustainability Framework (see page 24), Jersey Electricity has committed to achieve net-zero emissions
by 2050. The above table presents the key metrics that Jersey Electricity has implemented to enable the assessment,
tracking and on-going management of climate-related risks and opportunities.
Over the next year we will develop a suite of targets for these metrics to help deliver on our net-zero commitments,
including our Scope 1, 2 and 3 emissions targets.
Partial compliance with TCFD recommendation explanation:
Scope 3
Scope 3 emissions are made up of purchased energy from EFW,energy imported from France, and indirect emissions
from supply chains.
Although Scope 3 emissions are out of our direct control, at Jersey Electricity we are committed to working with our
partners to protect the environment and achieve our vision of a carbon zero future.
We pledge to quantify the emissions, by applying the following approach:
• Increase supplier data:
By collaborating and educating our key suppliers, we aim to increase our data on sustainability performance. This will
help us create a more transparent supply chain and enable Jersey Electricity to measure and reduce Scope 3 emissions.
• Raise supplier awareness:
Defining responsibilities, forming teams, offering training, and providing the necessary tools are just some of the ways
to enable a supplier to build up its expertise and processes, as well as raising its awareness.
• Encourage a dialogue:
Obtaining supplier-specific feedback and encouraging dialogue allows for continuous improvement and joint progress
towards a more sustainable supply chain, more sustainable companies, and a more sustainable industrial sector.
• Conduct regular comparative studies:
Industry-specific and cross-industry benchmarks shine a light on market positioning and the direction a common climate
action strategy must take.
Non-compliance with TCFD recommendation explanation: Science Based Targets (SBTs)
Science Based Targets enable investors and other stakeholders to understand how an organisation measures and monitors
its climate-related risks and opportunities.
Due to the complexity of the tariff price model, increasing concerns over the cost-of-living crisis and many other
macro-events currently facing local and global economies, the ability to set SBTs, along with a clear plan and timelines
is challenging and requires significant further analysis. Jersey Electricity will undertake a feasibility study in 2023, to define
credible and achievable carbon reduction targets, without negatively impacting our commitments to deliver affordable
and secure energy to our customers.
Annual Report and Accounts 2022 73
Board of Directors
Phil Austin MBE
Wendy Dorman
Tenure on Board
Appointed 12 May 2016 and
Chair from 28 February 2019
Appointed 14 July 2016
Committee Memberships
Nominations Committee
Audit and Risk Committee (Chair)
Remuneration Committee
Nominations Committee
Experience
Financial services background and
board level experience across a wide
range of listed and private companies
Chartered Accountant with audit
and tax experience
Leadership positions including Head
of Tax for PwC Channel Islands
and listed company Non-Executive
Director roles with audit chair
experience for listed companies
Relevant Skills
Extensive experience in leadership
and management
Deep understanding of governance
standards and requirements
Good communication skills
Leadership and management
Infrastructure investment
Accountancy, audit and taxation
External Appointments
Chair of Octopus Renewables
Infrastructure Trust plc
Non-Executive Director of 3i
Infrastructure plc
Non-Executive Director of Blackstone/
GSO Debt Funds (Europe) Ltd
Non-Executive Director of New City
High Yield Fund Limited
Non-Executive Director of Ravenscroft
Cash Management Ltd
74
JERSEY ELECTRICITYGovernance
Chris Ambler
Amanda Iceton
Appointed as Chief Executive
1 October 2008
Appointed 1 June 2020
Nominations Committee
Audit and Risk Committee
Remuneration Committee
Chartered Engineer in various
leadership and general management
roles in blue chip multinationals
Strategy consultancy experience
with MBA (INSEAD)
Broad experience across global utility,
chemicals and industrial sectors
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
Leadership and management
Strategy development
M&A and corporate finance
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 Apax
Global Alpha Ltd
Non-Executive Director of Foresight
Solar Fund Ltd
Non-Executive Director of Paragon ID
Non-Executive Director of Standard
Bank Offshore Group Ltd
Annual Report and Accounts 2022 75
Board of Directors
Alan Bryce
Tony Taylor
Tenure on Board
Appointed 17 December 2015
Appointed 21 September 2017
Senior Independent Director
Committee Memberships
Nominations Committee (Chair)
Remuneration Committee (Chair)
Audit and Risk Committee
Nominations Committee
Experience
Senior management roles in leading
global advertising agencies
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
Relevant Skills
Business leadership and governance
Strategic planning and growth
Chartered engineer with extensive
knowledge of the utility industry
Customer experience
Stakeholder engagement
Asset and operational risk
management
Marketing and communications
External Appointments
Non-Executive Director of Northern
Ireland Electricity Networks Ltd
Non-Executive Director of
Jersey Milk Marketing Board
Non-Executive Director of
Northumbrian Water Ltd
Non-Executive Director of
Channel Radio Ltd
76
JERSEY ELECTRICITYGovernance
Kayte O’Neill
Martin Magee
Appointed 3 March 2022
Appointed as Finance Director
8 April 2002
Audit and Risk Committee
Remuneration Committee
Executive leadership roles in
Strategy, Regulation, Markets and
large-scale Transformation.
Extensive experience working
with policymakers and regulators
to develop and implement
frameworks and business models
to support energy transition.
Designing and operating electricity
markets in the UK.
Chartered Accountant
Broad experience across a number
of senior finance roles in UK listed
plc’s, including utilities
Leadership and management
Strategic planning
Stakeholder engagement
Strong financial analysis
and planning skills
Commercial bias
Strong background in transactional
activity
Executive Director on the
Board of National Grid ESO
Non-Executive Director of Jersey Post
International Ltd
Non-Executive Director on the
Board of Regen.
Annual Report and Accounts 2022 77
Directors’ Report
for the year ended 30 September 2022
The Directors present their annual report
and the audited financial statements of
Jersey Electricity plc (“the Company”) and
Jersey Deep Freeze Limited (together “the
Group”) for the year ended 30 September
2022.
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 benefit of all its stakeholders as
a whole. In addition to its shareholders,
the Board engages with Government,
local Parishes, suppliers, customers and
employees. 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 sufficiently rewarded for
their efforts.
Dividends
The Directors have declared and paid, and now recommend the following dividends in respect of the year ended
30 September 2022:
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 7.60p net of tax for the year ended 30 September 2022 (2021:7.20p net of tax)
Final proposed at 10.80p net of tax for the year ended 30 September 2022 (2021: 10.20p net of tax)
2022
£
5,200
3,773
8,973
2021
£
5,200
3,773
8,973
2,328,640
3,309,120
2,206,080
3,124,280
5,637,760
5,330,360
Re-election of directors
All Directors seek re-election annually
at each AGM.
Directors’ and officers’
insurance
During the year the Company maintained
liability insurance for its Directors and
Officers.
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 10 days
(2021: 8 days).
Substantial shareholdings
As at 20 December 2022 the Company
has been notified of the following
holdings of voting rights of 5% or more
in its issued share capital:
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 5,382,424 ‘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 and a
78
fund based in the Channel Islands.
Company Secretary
Lisa Floris left her position as Company
Secretary on 31 October 2022. We are
currently recruiting a replacement
and Andrew Welsby, our HR Director,
is holding this position as an interim
measure.
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
A. WELSBY
Secretary
20 December 2022
JERSEY ELECTRICITYGovernance
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 noncompliance.
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 2022
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 six 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, Kayte O’Neill,
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 60 to 64), 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.
Table A below sets out the number
of meetings (including Committee
meetings) held during the year under
review and the number of meetings
attended by each Director.
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 consultancy in Board
matters which has no connection with
the Company, the findings of which
were reviewed and actions implemented
in this financial year. During this year,
this was supplemented by internal
evaluations, including those of Board
sub-Committees, co-ordinated by the
Chairman. 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).
Table A
No of meetings
Chris Ambler
Phil Austin
Alan Bryce
Wendy Dorman
Amanda Iceton
Martin Magee
Kayte O’Neill**
Tony Taylor
Board
6
Audit and Risk
4
Remuneration Nominations
2
9
6
6
6
6
6
6
4
6
1*
2*
4
4
4
4*
3
-
5*
9
-
-
9
5*
8
9
2
2
2
2
-
-
-
2
* attendees by invitation
** Kayte O’Neill attended all relevant meetings following her appointment on 3 March 2022.
Annual Report and Accounts 2022 79
Corporate Governance continued
Workforce Engagement
During 2020, a workforce Culture and
Engagement Forum was established
with representatives from across the
Company. At least one non-Executive
Director attends each meeting of this
forum which provides 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:
80
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.
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 (ARC)
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 60-64).
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 Officer. 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 and employees,
and regular presentations are provided
to the Board on how such relationships
are managed and can be improved.
JERSEY ELECTRICITYGovernance
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 2022.
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 Company
Secretary, and there were no changes to
the membership during the reporting
period. The Committee met twice, as
recorded in Table B below. All of the
members also met on other occasions to
form the interview panel for the selection
of our new NED, Kayte O’Neill.
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. This
was in the context of planning and
implementing succession for two roles,
namely the appointment of a new
NED following a resignation at the end
our prior year, and to commence the
recruitment of a new Finance Director for
when Martin Magee retires in the second
half of 2023. As we lead and support
Jersey’s transition to an affordable,
secure, and sustainable energy future,
the Board considers it important to
further enhance our knowledge and
experience of future energy markets,
including the growing focus on products
and services that enable customers
to interact with the energy market, as
“prosumers*”, and of the continuing
digital transformation of our business.
These continue to be particular target
areas of skills and experience for us,
together with a focus on enhancing
diversity in the Company’s leadership.
Following an extensive search for a new
NED, supported by the Trusted Advisor
Partnership, Kayte O’Neill was appointed
to the Board at its meeting on 3 March.
Kayte is an executive director of the
National Grid Electricity System Operator
(ESO), as Transformation Director,
and brings a wealth of experience
of energy markets, and of the digital
systems required to support them. She
also brings experience of distributing
electricity to over 3 million retail
customers, having worked with National
Grid in the United States.
On 11 August, our Finance Director,
Martin Magee, gave us advanced
notice of his intention to retire from
the Company by 30 September 2023,
*Prosumers are those who both produce and consume electricity.
Table B
Attendance
Meetings Attended
Alan Bryce (Chair)
Phil Austin
Chris Ambler
Wendy Dorman
Tony Taylor
2
2
2
2
2
2
2
2
2
2
100%
100%
100%
100%
100%
Annual Report and Accounts 2022 81
Nominations Committee Report continued
after more than twenty years of
service. The Committee recommended
the engagement of Russell Reynolds
to support the search for Martin’s
replacement, with a view to a smooth
handover prior to his retirement. The
role has been extensively advertised
both in the Jersey press and on the UK
mainland, eliciting contact with around
90 potential candidates, some two dozen
initial interviews with Russell Reynolds,
resulting in a shortlist of more than half
a dozen candidates. The final selection
process is currently underway.
The Board’s present skills mix is
summarised in Table C below.
Succession Planning
In addition to its consideration of
Board structure, composition, skills
and succession, the Committee
maintains oversight more broadly, of
the succession pipeline and plans at
the Company’s senior management
levels. These comprise of the six-strong
Executive Leadership Team (ELT) and the
around twenty members of the Senior
Leadership Team (SLT). This year, as part
of assessing our leadership strengths
and development needs, Norman
Broadbent were engaged to carry out a
development review at SLT level, looking
at capabilities and leadership styles
for each member of the team. This has
been used to draw up personalised
development plans and is an important
part in enhancing JE’s internal succession
pipeline.
The Committee remains satisfied that
the Company has access to an adequate
pipeline of successors to senior roles,
either internally or through targeted
external recruitment. It remains true that
some specialist skills are in short supply
on-Island, and this makes it necessary
to maintain a two-prong approach of
internal staff development and off-Island
recruitment.
Board Evaluation
Following our externally-facilitated Board
evaluation last year, the Committee
has this year facilitated an internal
evaluation of the performance of the
Board, its Committees, and the Chair.
Each director completed a questionnaire,
followed by a series of 1:1 meetings
with the Chair, and a Board discussion
to consider the overall conclusions.
Directors also completed a questionnaire
on the Chair’s performance, and the
Senior Independent Director convened
a meeting of the NEDs to review the
conclusions.
In addition to reviewing progress
against actions from last year’s review,
the Board has considered and agreed
a small number of actions arising this
year. The Committee is pleased to note
that the actions from last year’s review
have been essentially completed, and
in particular that these have led to
specific outcomes, notably on strategy
and Board engagement with local
stakeholders and the workforce. The
whole Board for example, has met with
Jersey Government officials on several
occasions this year, to understand better
how JE can support the island’s evolving
energy and sustainability strategies.
It has also held additional internal
deep-dive sessions to consider digital
strategy, sustainability, and future energy
scenarios. The Board has increased its
formal interaction with the workforce,
with a NED attending each meeting of JE’s
Culture and Engagement Forum, which
meets approximately quarterly.
The results of all this year’s evaluations
were satisfactory with recommendations
mainly around further underpinning
of those from last year, as well as
confirmation that the Board composition
remains well balanced for the needs of
the business.
Diversity and Inclusion
The Committee continues to support the
Board in setting and monitoring progress
against our Diversity and Inclusion (D&I)
strategy. Our goals comprise improving
the level of diversity in the Company,
as well as continuing to progress the
development of a fully diverse and
inclusive culture that both enables us to
attract and retain a diverse workforce.
The composition of our employees by
gender is presented in Table D below:
Overall, our Company gender
balance has improved this year by
3 percentage points. In conjunction
with the Remuneration Committee,
the Nominations Committee has
been concerned to ensure that the
deterioration in the reported gender
pay gap this year, is both understood
and expected to reverse. In the year, the
mean gap and median gaps increased
respectively, to 21.4% (2021: 18.7%) and
to 19.1% (2021: 9.2%). The underlying
reason for the deterioration is that our
recruitment happens to have been
Table C
Table D
Board Mix of Specialist Skills, Tenure and Gender
Diversity and inclusion
Gender
Male
Female
5
3
Company
First Line Reports
Senior leadership team
Male
77%
76%
78%
Executive leadership team 100%
Board
62%
Female
23%
24%
22%
0%
38%
Specialist skills
Tenure
1-3 years
3-6 years
6-9 years
2
1
3
>9 years
2*
Board Governance
Engineering
Digital and Cyber
Finance and Accounting
Strategy, M&A
3
2
2
3
2
Customers and marketing 1
Energy and renewables
2
*The CEO and Finance Director are included in this figure.
82
JERSEY ELECTRICITYGovernance
more focused this year on lower paid
roles, and as a result of recruiting more
females than males overall, the ratio has
been impacted negatively. It has been
further impacted by a small number of
more highly paid females only being
present for a part-year. These effects are
expected to be transitory.
As I reported last year JE has a very
committed and stable workforce, which
does make it quite a slow process
to effect structural change, so the
Board’s focus is on making sure that
opportunities to increase diversity are
taken whenever they arise, and that
the culture of the organisation feels a
very inclusive one. The four strands of
our strategy remain in place, of Hiring,
Schools Engagement, Workforce Culture
and Performance and Data. Despite
the most welcome addition of seven
apprentices to our business this year,
it is disappointing that we were unable
to recruit any female apprentices. We
are continually looking at initiatives
to promote a career in JE with young
people, including selective sponsorship
of teams and organisations that might
improve the reach of our message.
On Workforce Culture, I am very pleased
to report that the Business achieved a
key goal it had set itself for the report
year of reaching “Established” status
in Inclusive Employers Diversity and
Inclusion Maturity model. This level
of maturity means that our leaders
understand and champion the business
case for D&I, building it into our strategy,
and into the delivery of day-to-day
services, while continually looking
for best practice to improve our D&I
capability. An example of this is our use
of D&I impact assessments when we roll
out products and services to customers
or implement change internally. Our
D&I activities do not stop with our own
staff nor with our customers; we have
started to include D&I briefing in all local
contractor inductions to ensure that they
are aware that we are committed to a
diverse and inclusive work environment.
As part of our Safe Contractor system,
led by JE’s Health Safety and Environment
(HSE) team and Procurement team,
companies working for us are required to
evidence their commitment to D&I.
Internally our D&I Working Group,
comprised of people with a protected
characteristic, has been active this year
in advising us on the inclusive leadership
behaviours which form part of our
leadership competency framework, used
throughout the Business. Training and
competency has played a big part in this
year’s activities with two programmes
rolled out to underpin knowledge of
D&I, and a number of executive-led D&I
strategy awareness sessions with the
full SLT group, promoting ownership
of the agenda within the top leaders in
our business. Also within the Business,
we launched a people policy to support
staff going through the menopause,
as we signed up to the island-wide
“51 Employers” initiative to offer a
menopause-friendly workplace.
Externally, JE also supported the
2022 Channel Islands Pride event in
September as a gold sponsor, very much
in line with our vision and inclusive
employer credentials, which form an
integral part of our Employee Value
Proposition. We are also proud to have
been asked by other local organisations
to share our experience of D&I best
practice, and are happy to provide advice
and support.
Board Apprentice
As part of our continuing support for
encouraging greater gender diversity
on the boards of companies and other
public bodies, especially ones based
in Jersey, I am delighted to report that
Catherine Madden accepted our offer to
join us in September, as our latest Board
apprentice. Catherine is Chief of Staff
to the CEO in the Jersey Government.
She has wide experience of senior roles
in the public sector and through her
apprenticeship is seeking to understand
in particular, corporate governance and
risk management at board level in a
listed plc. The appointment is wholly in
a personal capacity and processes are in
place to manage any potential conflicts
between her role as an apprentice and
her role in the Government. It is also
pleasing to report that our previous
Board apprentice, Lisa McLauglan, who
left us in March, has been appointed to
the Board of Jersey Sport.
A. BRYCE
Chairman
20 December 2022
Annual Report and Accounts 2022 83
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 four serving
members, Alan Bryce, Amanda Iceton,
Kayte O’Neill and myself. We have seen
a change in membership during the year
with Kayte joining post her appointment
at our AGM to replace Peter Simon who
stepped down from the Board and the
Committee in August 2021. 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 74 to 77.
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 Company Secretarial
function 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
84
• 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:
• Monitoring preparations for reporting
against TCFD recommendations
• Self-review of ARC effectiveness and
action points arising
• Assessing controls in place to mitigate
risks identified as increasing
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 2022 audit
to be effective and of a high quality.
The FRC’s Audit Quality Review (AQR)
team routinely monitors the quality of
the audit work of certain audit firms
through inspections of a sample of audits
and related procedures at individual
audit firms. During the year, the AQR
team selected PwC’s audit of the Group’s
financial statements for the year ended
30 September 2021 as part of their
sample for review. The Chair of the Audit
Committee held discussions with the AQR
team prior to the review commencing,
and the Audit Committee received and
reviewed the final report from the AQR
team, which identified no key findings.
The Committee met separately with the
external auditor without management
present and I meet the engagement
leader, Lisa McClure, during the year
to discuss any matters which she would
like to raise.
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. During the year
the Committee decided to put in place
a formal Non-Audit Services policy, to
include a process in relation to affiliated
entities, and this is being drafted. As
disclosed in Note 6 to the Financial
Statements, no non-audit services were
provided to the Group by PwC in the year.
JERSEY ELECTRICITYGovernance 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 2022 and
reviewed by the Board, and the higher
volatility currently being seen in energy
markets and currency markets. Stress
testing carried out by management
based on severe but plausible scenarios
were reviewed.
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
As a company with a premium listing
the Company is required to report
under the 2018 Corporate Governance
Code. We continually strive to meet
the expectations of public company
reporting and enhance the quality of
stakeholder communications.
Task Force on Climate-related
Financial Disclosures (TCFD)
The FCA listing rules require premium-
listed companies to make disclosures
under the TCFD framework for
accounting periods beginning on or
after 1 January 2021. This is the first
year in which disclosures are required
for the Company. The Audit and Risk
Committee has reviewed TCFD reporting
status throughout the year, including a
TCFD readiness assessment carried out
in January and work done to enhance
our TCFD compliance. Refer to relevant
section in the accounts on pages 66
to 71. We expect to continue to focus
on this during the coming year as the
Company makes further progress under
the four pillars of TCFD.
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. 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 2022 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.
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. The Committee also monitor the
independence of BDO, taking account
of any other services provided to the
Company. The scope of internal audit
reviews has been refreshed which has
allowed us to identify areas in which
controls can be strengthened.
A number of audit reviews carried
out produced low or moderate
findings. Reviews with notable findings
included out of hours services, and
Annual Report and Accounts 2022 85
Audit and Risk Committee Report continued
a post-implementation review of the
introduction of a new management
software inventory system. In both cases
ARC monitored remediation actions and
were satisfied that the higher operational
risk rated findings were prioritised
appropriately.
Risk Management
During the year the Board carried out
its annual review of the Company’s risk
appetite and mapping to principal risks.
Following an in-depth review in the
previous year, no further changes were
proposed.
A risk management review was
commissioned last 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. A follow-on review is
being carried out and the outcome of
this review together with any proposed
actions will be reported in due course.
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. The focus of
our work this year was around market
volatility and impact on future pricing,
and the war in Ukraine and implications
for energy security. These two areas
have been considered in depth, including
a review of enhanced mitigation plans
and the Board’s review of the five year
plan. Cyber risk is also identified as an
increasing risk, and internal audits have
been carried out on the Corporate IT,
and SCADA operational systems as well
as both internal and external penetration
testing. Further details are set out in
the Group risk management section on
pages 58 to 65.
ARC Effectiveness
During the year the Audit Committee
Chair, with support from the Head of
Internal Audit, assessed the effectiveness
of the Audit and Risk Committee using
a self-assessment tool, and the findings
were discussed at the July meeting.
The review helped the Committee
to identify areas in which we could
develop our work, including a review of
levels of assurance over non-financial
information, more detailed consideration
of time horizons in our risk reviews, and
enhanced reporting from management
to underpin our reliance on internal
controls over financial risk and fraud.
These are all being actioned.
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
20 December 2022
86
JERSEY ELECTRICITYGovernance Remuneration Committee Report
On behalf of the Board, I am pleased to present the
Remuneration Committee’s (the Committee) report for the
financial year ended 30 September 2022. I would also like
to thank the other Committee members for their valuable
help during the last year, being Phil Austin, Amanda lceton
and Kayte O’Neill.
The terms of reference for the
Committee, which are in line with the
UK Corporate Governance Code, were
approved by the Board in December
2021. These are available on the
Company’s website (www.jec.co.uk).
Nine meetings of the Committee 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 sets the
Company’s Remuneration Policy and
is responsible for determining the
remuneration terms and conditions
of employment for the Executive
Directors. The Committee also reviews
the remuneration for the broader senior
management team and the general pay
policy for the wider workforce to ensure
there is a degree of alignment across the
organisation.
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, in both
the short and long term. Remuneration
packages currently 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 November. During the year, the
Committee approved salary increases
of 3% for the Executive Directors which
were in line with the increases awarded
to the wider employee population.
Benchmarking
We regularly commission expert
third-party advisors to undertake
a comprehensive review of the
competitor landscape to benchmark the
remuneration for our Executive Directors
and to advise on the quantum and
structuring of Executive compensation.
This benchmarking looks at comparable
companies in the UK/EU, as this is
considered the relevant labour market
for the skills required and also makes use
of locally focussed benchmarking data.
During 2022 the Committee were advised
by Mercer, as independent remuneration
consultants and their recommendations
are currently being considered by the
Committee.
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. 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 customer service/
satisfaction, employee engagement,
health and safety, financial performance
and delivery on key strategic objectives.
For example, during the year to
September 2022, key strategic objectives
in the Corporate Scorecard included
the development of long-term energy
sourcing strategies, delivering renewable
energy projects and enhancing the
stakeholder engagement. The Scorecard
also has direct linkages to both our
sustainability, and emerging TCFD,
objectives.
Each Executive Director has a maximum
cap on their total variable pay. These
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 30%-40%
deferment of the total bonus for two
years until October 2023. The deferred
amounts were £58,000 and £27,300 for
C. Ambler and M. Magee respectively set
when the share price was £6.255. The
deferred element of the bonus is subject
to malus and clawback provisions.
The remuneration paid, or estimated
to be payable, to Directors for the year
ended 30 September 2022 is shown in
Table E on the following page.
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.
Annual Report and Accounts 2022 87
Remuneration Committee Report continued
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 around half in the defined
contribution scheme and half in the
defined contribution scheme. In addition,
it was agreed by the Board at the time
of Chris Ambler’s appointment that he
would participate in a non-contributory
version of the defined benefit scheme
(refer to page 79 and the Statement of
Compliance section, noting Provision 38
of the Code).
Set out in Table F 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.
Table E
EXECUTIVE DIRECTORS
Chris Ambler
Martin Magee
NON-EXECUTIVE DIRECTORS
Phil Austin
Alan Bryce
Wendy Dorman
Amanda Iceton
Kayte O’Neill (appointed 3 March 2022)
Tony Taylor
Aaron Le Cornu (retired 4 March 2021)
Peter Simon (resigned 31 August 2021)
Total
Table F
Basic
salary/fees
£
263,921
209,990
Bonus
paid
in year
£
87,000
63,700
Bonus
deferred
in year
£
Benefits
in kind
£
Total
2022
£
Total
2021
£
58,000
27,300
16,119
12,958
425,040
412,306
313,948
304,958
43,000
30,000
28,000
25,000
16,256
25,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,762
1,762
1,762
1,762
991
1,762
- -
- -
44,762
31,762
29,762
26,762
17,247
26,762
44,882
28,882
29,882
26,882
-
26,032
12,288
24,646
641,167
150,700
85,300
38,878
916,045
910,758
Increase
in accrued
pension during
the year1
Accrued
pension at
30.9.20222
Transfer
value at
30.9.20223
Transfer
value at
30.9.20213
Chris Ambler
Martin Magee5
£6,473
£6,661
£76,585
£113,481
£995,985
£1,813,973
£1,421,328
£2,330,218
-6
£12,237
Increase/
Directors’
(decrease) in
contributions
transfer value
during year
less Directors
contributions4
£(425,343)
£(528,844)
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 £70,203 and £43,258 for C. Ambler and M. 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 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 AVC’s to the Scheme to purchase additional final salary benefits. AVC’s paid by the Directors during
the year were nil.
6. As highlighted in the table above, it was agreed by the Board at the time of Chris Ambler’s appointment that he would participate in a non-contributory version of the
defined benefit pension scheme.
88
JERSEY ELECTRICITYGovernance
Table G
Year
2022
2021
25th %ile
50th %ile
75th %ile
8.1:1
8.4:1
6.2:1
6.3:1
4.3:1
4.4:1
CEO pay ratio
The CEO pay ratio was 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 CEO pay gap was also
calculated by consultants, Spktral, using
a more refined methodology than last
year (and hence the comparative figure
has been altered accordingly). Using their
methodology, the CEO pay gap remained
relatively static. See Table G above.
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 2022 financial year, the
workforce engagement and culture
forum met 3 times, and each attended
by one of our non-Executive Directors,
which provided an ideal opportunity
to gain first hand feedback from the
workforce.
Non-Executive Directors’
Remuneration
The remuneration of the non-
Executive Directors is determined
by the Executive Directors, with the
assistance of independent advice
concerning comparable organisations
and appointments and also taking into
account the particular Committees
in which they are involved. As with
Executive Director pay, Mercer were used
to provide such advice. A small premium
was paid in the financial year to those
who chaired Committees (Audit & Risk:
£5,000; Nomination/Remuneration:
£2,000) and to those who were members
of the Audit & Risk Committee (£2,000)
for additional responsibility, and to
Directors based off-Island (£3,000) for
travelling time.
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 £90,000
of which £72,000 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.
Annual Report and Accounts 2022 89
Remuneration Committee Report continued
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, or full, repayments
have been made by the Executive
Directors and the balances on such loans
were:
30.9.2022
30.9.2021
Chris Ambler
£300,000
£300,000
Directors’ Share Interests
The Directors’ beneficial interests in the
shares of the Company at 30 September
2022 are shown in Table H below.
There have been no other changes in
the interests set out above between 30
September 2022 and 20 December 2022.
On behalf of the Committee
T. TAYLOR
Chairman
20 December 2022
Table H
Chris Ambler*
Martin Magee*
Phil Austin
Alan Bryce
Wendy Dorman
Tony Taylor
Amanda Iceton
‘A’ Ordinary Shares
5% and 3.5% Preference Shares
2022
7,620
13,800
7,000
4,500
3,500
9,000
3,500
48,920
2021
7,620 -
13,800
5,000
4,500 -
3,500 -
5,000 -
- -
39,420
2022
960
-
2021
-
960
-
-
-
-
-
960
960
* Both Chris Ambler and Martin Magee have a beneficial interest in a further 100 ‘A’ Ordinary Shares that are due to vest in September 2023.
There have been no other changes in the interests set out above between 30 September 2022 and 20 December 2022.
90
JERSEY ELECTRICITYGovernance
Statement of Director’s 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 (International
Financial Reporting Standards) 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
Finance Director
20 December 2022
M.P. MAGEE
Finance Director
20 December 2022
Annual Report and Accounts 2022 91
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 subsidiaries (together “the group”) as at 30 September 2022, 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 2022;
•
•
•
•
•
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
Audit
Scope
Key Audit
Matters
92
Materiality
• Overall group materiality: £523,000 (2021: £954,000) based on approximately 5% of profit from
operations before taxation.
• Performance materiality: £392,000
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, the
subsidiary was determined to be a non-significant component as a percentage of the total. 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 the defined benefit obligation.
JERSEY ELECTRICITYGovernance 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 and include the most significant assessed risks of material misstatement (whether or not
due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the engagement team. 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.
The group recognised £89.7m of energy revenue
(2021: £89.8m) and £18.7m of retail revenue (2021: £19.8m).
Revenue from the energy segment comprises charges
for the consumption of electricity by customers and service
connections.
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 obtained an understanding and evaluated the overall
control environment around the recognition of revenue from
energy and retail.
Our approach to revenue from the energy segment was based
on a data analytics approach as follows:
We evaluated the operating effectiveness of the IT General
Controls surrounding the smart meter, billing and general
ledger systems.
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 traced them to either other asset accounts or
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 2022 93
Independent Auditor’s Report to the Members
of Jersey Electricity plc continued
Key audit matter
How our audit addressed the Key audit matter
Assessment of pension assumptions applied in the valuation of
defined benefit obligation
We obtained an understanding and evaluated the overall
control environment around the defined benefit obligation.
Refer to note 1 (Accounting policies), note 2 (Critical accounting
judgements and key sources of estimation uncertainty), and
note 17 to the financial statements.
The group has a defined benefit pension plan that was
recognised as a net surplus of £26.4m at the year-end (2021:
£18.8m). This comprises estimated plan liabilities of £86.1m
(2021: £142.3m) and plan assets of £112.5m (2021: £161.1m).
The valuation of the plan liabilities requires significant levels
of judgement 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 engaged our auditor’s experts to evaluate the assumptions
made in relation to the valuation of the scheme liabilities.
We benchmarked the various assumptions used and compared
them to our internally developed benchmarks.
We 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.
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
£523,000 (2021: £954,000)
How we determined it
Approximately 5% of profit from operations before taxation
Rationale for benchmark applied
We believe that group’s 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% (2021: 75%) of overall materiality, amounting to £392,000 (2021:
£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 £26,000
(2021: £47,500) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
94
JERSEY ELECTRICITYGovernance Reporting on other information
The other information comprises all the information included in the Annual Report and Accounts 2022 (the “Annual Report”) but
does not include the consolidated financial statements and our auditor’s report thereon. The directors are responsible for the other
information which includes reporting based on the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.
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.
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.
Annual Report and Accounts 2022 95
Independent Auditor’s Report to the Members
of Jersey Electricity plc continued
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.
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.
96
JERSEY ELECTRICITYGovernance 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, included within Group risk management, the Statement of Director’s responsibilities and the Financial
Review 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.
Other matter
In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these
consolidated financial statements will form part of the ESEF-prepared annual financial report filed on the National Storage
Mechanism of the Financial Conduct Authority in accordance with the ESEF Regulatory Technical Standard (“ESEF RTS”). This auditor’s
report provides no assurance over whether the annual financial report will be prepared using the single electronic format specified
in the ESEF RTS.
LISA McCLURE
for and on behalf of
PricewaterhouseCoopers CI LLP
Chartered Accountants and Recognized Auditor
Jersey, Channel Islands
20 December 2022
Annual Report and Accounts 2022 97
Consolidated Income Statement
for the year ended 30 September 2022
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2022
All results in the year have been derived from continuing operations.
The notes on pages 102 to 129 form an integral part of these accounts. The independent auditor’s report is on pages 92 to 97.
98
JERSEY ELECTRICITYFinancial Statements Note 2022 2021 £000 £000Revenue 3 117,421 118,608Cost of sales (77,242) (74,159)Gross profit 40,179 44,449Revaluation of investment properties 11 1,020 6,055Operating expenses 4 (29,293) (29,991)Group operating profit 3 11,906 20,513Finance income 218 112Finance costs (1,523) (1,540)Profit from operations before taxation 10,601 19,085Taxation 7 (2,135) (2,794)Profit from operations after taxation 8,466 16,291Attributable to: Owners of the Company 8,326 16,155Non-controlling interests 19 140 136 8,466 16,291Earnings per share - basic and diluted 9 27.17p 52.73p Note 2022 2021 £000 £000Profit for the year 8,466 16,291Items that will not be reclassified subsequently to profit or loss: Actuarial gain on defined benefit scheme 17 8,976 14,803Income tax relating to items not reclassified 7 (1,795) (2,961) 7,181 11,842Items that may be reclassified subsequently to profit or loss: Fair value gain/(loss) on cash flow hedges 22 4,815 (3,116)Income tax relating to items that may be reclassified 7 (963) 623 3,852 (2,493)Total comprehensive income for the year 19,499 25,640Attributable to: Owners of the Company 19,359 25,504Non-controlling interests 140 136 19,499 25,640 Consolidated Balance Sheet
as at 30 September 2022
Approved by the Board on 20 December 2022
P.J. AUSTIN
Director
M.P. MAGEE
Director
The notes on pages 102 to 129 form an integral part of these accounts. The independent auditor’s report is on pages 92 to 97.
Annual Report and Accounts 2022 99
Note 2022 2021 £000 £000Non-current assetsIntangible assets 10 967 933Property, plant and equipment 11 216,235 216,550Right of use assets 11 3,280 3,113Investment properties 11 28,830 27,810Trade and other receivables 14 300 308Retirement benefit asset 17 26,434 18,761Derivative financial instruments 22 2,640 108Other investments 12 5 5Total non-current assets 278,691 267,588Current assetsInventories 13 7,173 6,909Trade and other receivables 14 19,934 18,000Derivative financial instruments 22 483 -Cash and cash equivalents 47,397 43,136Total current assets 74,987 68,045Total assets 353,678 335,633LiabilitiesTrade and other payables 15 21,043 18,373Current tax liabilities 7 2,088 3,020Lease liabilities 16 69 72Derivative financial instruments 22 330 1,256Total current liabilities 23,530 22,721Net current assets 51,457 45,324Non-current liabilitiesTrade and other payables 15 25,162 24,006Lease liabilities 16 3,251 3,035Derivative financial instruments 22 - 874Financial liabilities - preference shares 18 235 235Borrowings 16 30,000 30,000Deferred tax liabilities 7 32,126 29,321Total non-current liabilities 90,774 87,471Total liabilities 114,304 110,192Net assets 239,374 225,441EquityShare capital 18 1,532 1,532Revaluation reserve 5,270 5,270ESOP reserve (38) (79)Other reserves 2,234 (1,618)Retained earnings 230,232 220,178Equity attributable to the owners of the Company 239,230 225,283Non-controlling interests 19 144 158Total equity 239,374 225,441
Consolidated Statement of Changes in Equity
for the year ended 30 September 2022
Note
Share Revaluation
reserve
capital
ESOP
reserve
*Other Retained
earnings
reserves
Total
At 1 October 2021
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 2022
At 1 October 2020
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
*’Other reserves’ represents the foreign currency hedging reserve.
8
8
£000
1,532
-
-
-
-
-
1,532
1,532
-
-
-
-
-
£000
£000
£000
£000
£000
5,270
-
-
-
-
-
(79)
-
41
-
-
-
(1,618)
220,178
225,283
-
-
3,852
8,326
-
-
-
-
7,181
(5,453)
8,326
41
3,852
7,181
(5,453)
5,270
(38)
2,234
230,232
239,230
5,270
(120)
875
197,359
204,916
-
-
-
-
-
-
41
-
-
-
-
-
(2,493)
16,155
16,155
-
-
41
(2,493)
11,842
(5,178)
-
-
11,842
(5,178)
1,532
5,270
(79)
(1,618)
220,178
225,283
The notes on pages 102 to 129 form an integral part of these accounts. The independent auditor’s report is on pages 92 to 97.
100
JERSEY ELECTRICITYFinancial Statements
Consolidated Statement of Cash Flows
for the year ended 30 September 2022
IAS 7 ‘Statement of Cash Flows’ requires the explanation of both cash and non-cash movements in assets and liabilities relating to financing activities. See notes 8 and 16.
Of the £47.4m cash and cash equivalents at 30 September 2022, £40.0m (2021: £35.0m) is on fixed term deposits with an average of 49 days remaining (2021: 79 days).
The notes on pages 102 to 129 form an integral part of these accounts. The independent auditor’s report is on pages 92 to 97.
Annual Report and Accounts 2022 101
2022 2021 £000 £000Cash flows from operating activitiesOperating profit 11,906 20,513Depreciation and amortisation charges 11,094 10,924Share-based reward charges 41 41Gain on revaluation of investment property (1,020) (6,055)Pension operating charge less contributions paid 1,303 3,357Deemed interest income from hire purchase arrangements 50 -Profit on sale of property, plant and equipment (7) (6)Operating cash flows before movement in working capital 23,367 28,774Working capital adjustments: Increase in inventories (257) (881) (Increase)/decrease in trade and other receivables (1,926) (2,263) Increase in trade and other payables 4,444 904Net movement in working capital 2,261 (2,240)Interest paid on borrowings (1,380) (1,395)Preference dividends paid (9) (9)Income taxes paid (3,020) (2,742)Net cash flows from operating activities 21,219 22,388Cash flows from investing activitiesPurchase of property, plant and equipment (11,001) (8,513)Investment in intangible assets (319) (805)Deposit interest received 168 112Net proceeds from disposal of fixed assets 7 6Net cash flows used in investing activities (11,145) (9,200)Cash flows from financing activitiesEquity dividends paid (5,453) (5,178)Dividends paid to non-controlling interest (154) (101)Repayment of lease liabilities (206) (297)Net cash flows used in financing activities (5,813) (5,576)Net increase in cash and cash equivalents 4,261 7,612Cash and cash equivalents at the beginning of the year 43,136 35,520Effect of foreign exchange rate changes - 4Cash and cash equivalents at the end of the year 47,397 43,136
Notes to the Consolidated Financial Statements
for the year ended 30 September 2022
1 Accounting policies
Basis of preparation
The Group’s accounting policies as applied for the year ended 30 September 2022 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 2022 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 page 10). The financial position of the Group, its cash flow and its liquidity position are
described in the Financial Review (see page 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 57 and 58.
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.
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.
102
JERSEY ELECTRICITYFinancial Statements
1 Accounting policies (continued)
Revenue (continued)
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.
Where financing is provided, repayment terms are typically up to five years. As such a deemed interest charge is
calculated on an annual basis and offset against revenue.
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% (2021: 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.
Annual Report and Accounts 2022 103
Notes to the Consolidated Financial Statements
for the year ended 30 September 2022
1 Accounting policies (continued)
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.
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.
104
JERSEY ELECTRICITYFinancial Statements
1 Accounting policies (continued)
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.
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 are readily convertible to a known amount of cash, subject to an
insignificant risk of change in value.
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.
Annual Report and Accounts 2022 105
Notes to the Consolidated Financial Statements
for the year ended 30 September 2022
1 Accounting policies (continued)
Financial instruments (continued)
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.
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.
106
JERSEY ELECTRICITYFinancial Statements
1 Accounting policies (continued)
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
Phase 2 of the Interest Rate Benchmark Reform became effective for the Group from 1 October 2021. Under Phase 2, provided
that the new basis for calculating cash flows is economically equivalent to the previous basis, reliefs permit hedge accounting
relationships to continue unaffected. The Group has applied these reliefs to continue hedge accounting on affected instruments
and therefore adoption of the amendment had no impact on the financial statements.
The amendment to IFRS 16 ‘COVID-19 Related Rent Concessions beyond 30 June 2021’ has also had no impact on the financial
statements.
New standards, amendments and interpretations issued, but not yet adopted by the Group
A number of standards, amendments and interpretations have been issued but not yet adopted by the Group within these
financial statements, because application is not yet mandatory or because UK adoption remains outstanding at the date the
financial statements were authorised for issue.
Amendments to IAS 16 ‘Property, Plant and Equipment: Proceeds Before Intended Use’ is effective from 1 January 2022 and was
endorsed by the UK Endorsement Board in April 2022. The standard is not anticipated to have any impact given the nature of
the amendments and the usual course of business for the Group.
IFRS 17 ‘Insurance contracts’ is expected to be effective from 1 January 2023 (1 October 2023 for the Group) but remains subject
to UK endorsement. The Group’s initial expectation is that adoption of this standard will not have a material impact on the
Group’s consolidated financial statements.
There are a number of other interpretations and amendments issued but not yet effective at 30 September 2022. These are not
anticipated to have a material impact on the Group’s consolidated financial statements.
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).
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 significant effect on
the amounts recognised in financial 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 definitive 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.
Annual Report and Accounts 2022 107
Notes to the Consolidated Financial Statements
for the year ended 30 September 2022
2 Critical Accounting Judgements and key sources of estimation uncertainty (continued)
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 significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year are disclosed below.
Retirement benefit obligations
The Group provides pensions through a defined benefits scheme for a number of its employees which is accounted for in
accordance with IAS 19 ‘Employee Benefits’. The benefit obligation is discounted at a rate set by reference to market yields at
the end of the reporting period on high quality corporate bonds. Significant judgement is required when setting the criteria
for bonds to be included in the population from which the yield curve is derived. The most significant criteria considered for
the selection of bonds include the issue size of the corporate bonds, quality of the bonds and the identification of outliers
which are excluded. The discount rate used in 2022 was 5.2% and in 2021 was 2.1%.
108
JERSEY ELECTRICITYFinancial Statements
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:
Annual Report and Accounts 2022 109
2022 2022 2022 2021 2021 2021 External Internal Total External Internal Total £000 £000 £000 £000 £000 £000RevenueEnergy 89,683 100 89,783 89,780 100 89,880Building Services 3,365 780 4,145 3,399 645 4,044Retail 18,695 41 18,736 19,808 68 19,876Property 2,345 639 2,984 2,304 645 2,949Other* 3,333 625 3,958 3,317 945 4,262 117,421 2,185 119,606 118,608 2,403 121,011Intergroup elimination (2,185) (2,403)Revenue 117,421 118,608Operating profitEnergy 7,502 10,693Building Services 266 217Retail 1,174 1,533Property 1,436 1,393Other 508 622 10,886 14,458Revaluation of investment properties 1,020 6,055Operating profit 11,906 20,513Finance income 218 112Finance costs (1,523) (1,540)Profit from operations before taxation 10,601 19,085Taxation (2,135) (2,794)Profit from operations after taxation 8,466 16,291Attributable to: Owners of the Company 8,326 16,155Non-controlling interests 140 136 8,466 16,291*Other segment includes the divisions of Jersey Energy and Jendev as well as 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 profit 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 financial statements.
Notes to the Consolidated Financial Statements
for the year ended 30 September 2022
4 Operating expenses
5 Directors and employees
Detailed information in respect of Directors’ shareholdings and emoluments, pensions and benefits is given in the
Remuneration Committee Report. The number of persons (full time equivalents) employed by the Group (including
non-Executive Directors) at 30 September was as follows:
The aggregate payroll costs of these persons were as follows:
110
JERSEY ELECTRICITYFinancial Statements 2022 2021 £000 £000Distribution costs 14,481 12,363Administration expenses 14,812 17,628 29,293 29,991 2022 2021 Number NumberEnergy 253 238Other businesses 92 88Trainees 18 21 363 347 2022 2021 £000 £000Wages and salaries 20,144 18,592Social security costs 1,097 1,003Pension (note 17)* 2,888 4,967 24,129 24,562Capitalised manpower costs** (1,748) (2,083) 22,381 22,479* The pension costs above relate to the defined benefit pension scheme. The contributions recognised as an expense relating to the defined contribution scheme are included within wages and salaries and amount to £0.7m (2021: £0.5m).** Capitalised manpower costs are included in note 11 under categories ‘Mains cables and services’, ‘Fixtures, fittings, vehicles’ and ‘Interlinks’, etc. 6 Group operating profit
Operating profit 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
2022
£000
264
-
2021
£000
249
-
Depreciation of property, plant, equipment and right-of-use assets (note 11)
10,809
10,573
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 profit on ordinary activities
285
1,660
685
25
1,999
2022
£000
2,088
2,088
351
2,350
726
(110)
1,908
2021
£000
3,020
3,020
47
(226)
2,135
2,794
The differences between the total tax charge shown above and the amount calculated by applying the standard rate of Jersey
Income Tax to the profit before tax is as follows:
Profit from ordinary activities before tax
Tax on profit on ordinary activities at standard income tax rate of 20% (2021: 20%)
Effects of:
Expenses not deductible for tax purposes
Income not taxable for tax purposes
Non-qualifying depreciation
Group current tax charge for year
2022
£000
10,601
2,120
42
(339)
312
2,135
2021
£000
19,085
3,817
17
(1,328)
288
2,794
Annual Report and Accounts 2022 111
Notes to the Consolidated Financial Statements
for the year ended 30 September 2022
7 Taxation (continued)
Deferred Tax
The following outlines the major deferred tax assets/liabilities recognised by the Group and Company:
Deferred tax movements in the year
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
effective tax rate on pre-tax profits is 20% (2021: 21%) due to the manner in which capital allowances are applied in place of
depreciation expenses which are included in the pre-tax profit figure. As the tax liability rests with the Government of Jersey, the
right to offset 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:
The proposed dividend is subject to approval at the forthcoming AGM and has not been included as liabilities in these financial
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.
112
JERSEY ELECTRICITYFinancial Statements Per Share In Total 2022 2021 2022 2021 pence pence £000 £000Ordinary and ‘A’ Ordinary:Dividend paid final for previous year 10.20 9.70 3,125 2,972 interim for current year 7.60 7.20 2,328 2,206 17.80 16.90 5,453 5,178Dividend proposed final for current year 10.80 10.20 3,309 3,125 Group and Company 2022 2021 £000 £000Accelerated capital allowances 26,280 25,973Derivative financial instruments 559 (404)Pensions 5,287 3,752Provisions for deferred tax 32,126 29,321 Group and Company 2022 2021 £000 £000At 1 October 29,321 27,209Charged to profit and loss account 47 (226)Charged to statement of comprehensive income 2,758 2,338At 30 September 32,126 29,321
9 Earnings per Ordinary share
Earnings per Ordinary and ‘A’ Ordinary share (basic and diluted) of 27.17p (2021: 52.73p) are calculated on the Group profit, after
taxation, of £8,326,000 (2021: £16,155,000), and on the 30,640,000 (2021: 30,640,000) Ordinary and ‘A’ Ordinary shares in issue
during the financial year and at 30 September 2022. 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 2021
Additions
Disposals
At 30 September 2022
Amortisation
At 1 October 2021
Charge for the year
Disposals
At 30 September 2022
Net book value
At 30 September 2022
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
Computer Software
£000
2,421
319
-
2,740
1,488
285
-
1,773
967
Computer Software
£000
1,818
805
(202)
2,421
1,339
351
(202)
1,488
933
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 2022 was £1.3m. The average remaining
useful life of intangible assets is 3 years.
Annual Report and Accounts 2022 113
Notes to the Consolidated Financial Statements
for the year ended 30 September 2022
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 2021
Expenditure/lease additions
Revaluation
Reclassification
Disposals
At 30 September 2022
Depreciation
At 1 October 2021
Charge for the year
Reclassification
Disposals
At 30 September 2022
Net book value at
30 September 2022
37,166
515
-
-
(71)
37,610
11,909
777
-
(71)
12,615
17,373 115,789 101,639
4,408
3,513
-
-
-
(368)
-
-
18,022 118,934 106,047
281
-
368
-
22,987
1,628
-
-
(534)
24,081
98,182 393,136
10,383
-
-
(605)
98,220 402,914
38
-
-
-
8,016
405
41
-
8,462
71,645
2,953
(41)
-
74,557
35,729
1,496
-
-
37,225
12,824
1,949
-
(528)
14,245
36,463 176,586
10,692
-
(599)
39,575 186,679
3,112
-
-
3,326
344
(60)
-
-
3,610
213
117
-
-
330
27,810
-
1,020
-
-
28,830
-
-
-
-
-
24,995
9,560
44,377
68,822
9,836
58,645 216,235
3,280
28,830
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
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
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
114
JERSEY ELECTRICITYFinancial Statements
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 5.75% and 9.0% 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 £0.5m whilst the same variance for commercial properties would result in a movement in valuation of around
£1.4m. 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 2022 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 £1,456k (2021: £1,449k) with maintenance and repair cost
of £203k (2021: £161k). 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
watertight 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 (2021: £51k) at cost and a
net book value of £8k (2021: £12k).
d. The gross carrying amount of tangible assets still in use at net book value of zero at 30 September 2022 was £61.3m (2021:
£60.8m).
e. The Group leases land and buildings as part of its Energy business, classified as of right of use assets. In addition to the
depreciation expense relating to right of use assets of £117k (2021: £110k), the finance costs included in the consolidated
income statement arising from the lease liability was £134k (2021: £136k). The maturity analysis of lease liabilities is
presented in note 16.
Annual Report and Accounts 2022 115
Notes to the Consolidated Financial Statements
for the year ended 30 September 2022
12 Other investments
Principal group investments
The Company has investments in the following subsidiary undertaking and joint arrangement which principally affected the
profits or net assets of the Group.
Country of
incorporation or
principal business
address
Principal
activity
Shareholding
%
Holding
Financial
Year End
Joint arrangement:
Channel Islands Electricity Grid Limited
Jersey
Association with
5,000 Ordinary
50
30 November
Subsidiary undertaking:
Jersey Deep Freeze Limited
Jersey
Sale and
51 Ordinary
51 30 September
Guernsey Electricity
Limited
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 financial 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% (2021: 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 financial statements, as the Group is considered to exert control under IFRS 10.
Jersey Deep Freeze Limited has a reporting period end of 30 September.
116
JERSEY ELECTRICITYFinancial Statements 2022 2021 £000 £000Joint arrangement 5 5
13 Inventories
The amounts attributed to the different categories are as follows:
14 Trade and other receivables
Unbilled revenues included within trade and other receivables in the balance sheet relating to such customers at 30 September
2022 amounted to £6.1m (2021: £5.6m).
The secured loans include a loan to a Director.
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
Annual Report and Accounts 2022 117
2022 2021 £000 £000Fuel oil 1,887 2,019Commercial stocks and work in progress 4,068 3,348Generation, distribution spares and sundry 1,218 1,542 7,173 6,909During the year £15.1m (2021: £15.6m) was recognised directly in cost of sales in respect of inventories sold or used in operations or production. 2022 2021 £000 £000Amounts receivable within one year:Trade receivables (includes unbilled units) 17,436 15,850Prepayments and other receivables 2,498 2,150 19,934 18,000Amounts receivable after more than one year:Secured loan accounts 300 308 2022 2021 £000 £000Amounts falling due within one year:Trade payables 2,202 1,583Other payables including taxation and social security 10,203 8,058Accruals 8,132 8,218Deferred income 506 514 21,043 18,373Amounts falling due after more than one year:Accruals 102 144Deferred income 25,060 23,862 25,162 24,006The fair value of trade and other payables is considered by the Directors to be equivalent to its carrying value.
Notes to the Consolidated Financial Statements
for the year ended 30 September 2022
16 Borrowings
The long-term funding via a private placement is in place with Pricoa Capital Group (an affiliate of Prudential Financial, Inc) and
£30m of finance drawn on 17 July 2014. This consists of:
a. £15m for 20 years at a fixed rate coupon of 4.41%
b. £15m for 25 years at a fixed rate coupon of 4.52%
This facility includes externally imposed capital requirements. The financial 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
defined in the loan agreement. The Group continues to meet these covenants.
Lease liabilities
Right of use assets recognised under lease arrangements are detailed within note 11.
The maturity of future lease liabilities are as follows:
118
JERSEY ELECTRICITYFinancial Statements 2022 2021 £000 £000Unsecured borrowing at amortised costLoan obtained from private placement 30,000 30,000In addition the above borrowings are supplemented by an unsecured five year £10m revolving credit facility (RCF) from the Royal Bank of Scotland International Limited (RBSI) which provides flexibility as the timing of further planned capital expenditure is variable. This was renewed for a further five 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 2022.The fair value of the loan obtained from private placement at 30 September 2022 is considered to be £25.9m (2021: £35.0m). 2022 2021 £000 £000At 1 October 3,107 2,944Additions during the year 285 324Unwind of discount 134 136Repayment in the year (206) (297)As at 30 September:– Current 69 72– Non-current 3,251 3,035 3,320 3,107 2022 2021 £000 £000Payable within one year 254 237After one year but within five years 977 948After five years 8,686 8,335 9,917 9,520Less: future finance charge (6,597) (6,413)Present value of lease obligations 3,320 3,107
17 Pensions
Introduction
The Company sponsors a funded defined benefit pension plan for qualifying Jersey employee – the Jersey Electricity Pension
Scheme. The Scheme 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. The Trustees are required by law to act in the interest of
all relevant beneficiaries and are responsible for the investment policy for the assets and the day-to-day administration of the
benefits.
Under the Scheme, employees are entitled to annual pensions on retirement at age 65 of one-sixtieth or one-eightieth
(depending on the category of membership) of the 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 to these employees.
Profile of the Scheme
The Defined Benefit Obligation (DBO) includes benefits for current employees, former employees and current pensioners.
Broadly, about 47% of the DBO is attributable to current employees, 10% to deferred pensioners and 43% 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 15 years at 30 September 2022 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 at 31 December 2021 and showed a surplus
of £17.1m. The Company has agreed to pay 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 next funding
valuation is due no later than 31 December 2024.
Risks associated with the scheme
The Scheme exposes the Company to some risks, the most significant of which are:
Asset volatility
The DBO is 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 (such as 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 DBO for accounting purposes, although
this will be partially offset by an increase in the value of the Scheme’s bond holdings.
Inflation risk
A portion of the Scheme’s DBO is linked to inflation, and higher inflation leads to a higher DBO.
Most of the assets are either unaffected by or only loosely correlated with inflation, meaning that an increase in inflation may
also increase the deficit.
Life expectancy
The majority of the Scheme’s obligations are to provide benefits for the lifetime of the member, so increases in life
expectancy will result in an increase in the DBO.
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 which perform in line with the liabilities of the Scheme.
The Trustees insure certain benefits which are payable on death before retirement.
Annual Report and Accounts 2022 119
Notes to the Consolidated Financial Statements
for the year ended 30 September 2022
17 Pensions (continued)
Reporting at 30 September 2022
The results of the latest funding valuation at 31 December 2021 have been adjusted to the new balance sheet date, taking
account of experience over the period since 31 December 2021, changes in 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.
The principal assumptions used to calculate the liabilities under IAS 19 are as follows:
Main financial assumptions
120
JERSEY ELECTRICITYFinancial Statements Value at 30 Value at 30 September September 2022 2021 % p.a. % p.a.Discount rate 5.2 2.1Jersey RPI inflation 3.7 3.4Pension increases in payment– Short term (year 1) - 3.0*– Long term (year 2 onwards) - -Pension increases in payment for pensions purchased with AVCs 3.7 3.4Salary increase:– Short term (year 1) 6.0 4.0– Short term (year 2) 5.0 4.4– Long term (year 3 onwards) 3.7 4.4*The discretionary 3.0% pension increase was treated as a past service cost in 2020/21.The financial assumptions reflect the nature and term of the Scheme’s liabilities.Main demographic assumptions Value at 30 September 2022 Value at 30 September 2021Post-retirement mortality base tableSAPS “S3P” (All) tables for males and SAPS “S3P” (Mid) tables for females with 95% scalingSAPS “S2“ (All) tables for males and females with 90% scalingPost-retirement mortality future improvementsCMI 2021 projections (A = 0.0%, Sk = 7.0) with long-term improvements of 1.25% p.a.CMI 2018 projections (A = 0.0%, Sk = 7.0) with long-term improvements of 1.25% p.a.Life expectancy for male currently aged 6027.027.0Life expectancy for female currently aged 6029.029.1Life expectancy at 60 for male currently aged 4028.528.6Life expectancy at 60 for female currently aged 4030.530.7Pre-retirement mortality“AC00” tables for males and females with 100% scaling“AC00” tables for males and females with 100% scalingDB transfers0% of deferred members are assumed to transfer out0% of deferred members are assumed to transfer outAge difference A male member is assumed to be 3 years older than his wife/partnerA female member is assumed to be 1 year younger than her husband/partnerA man is assumed to be 3 years older than his wife/partnerProportion married85% of males and 62.5% of females are assumed to be married at retirement or earlier death80% of males and 70% of females are assumed to be married at retirement or earlier deathCash commutation Active and deferred members commute 20% of pension at a rate equivalent to 90% of the value of the member’s pensionActive and deferred members commute 15% of pension at a rate equivalent to 90% of the value of the member’s pensionThe mortality assumptions are based on the recent actual mortality experience of Scheme members and allow for expected future improvements in mortality rates.
17 Pensions (continued)
Assets
The Scheme assets are invested in the following asset classes. All assets have a quoted market value in an active market.
Reconciliation of funded status to balance sheet
Profit and loss and comprehensive income
Operating cost
Service costs:
Current service cost
Past service cost
Settlement cost
Administration expenses
Financing cost
Interest on net defined benefit liability / (assets)
Pension expense recognised in profit and loss
Remeasurements in OCI:
Return on plan assets (in excess of) / below that recognised in net interest
Actuarial (gains) / losses due to changes in financial assumptions
Actuarial (gains) / losses due to changes in demographic assumptions
Actuarial (gains) / losses due to liability experience
Total amount recognised in OCI
Total amount recognised in profit and loss and OCI
2022
£000
2021
£000
2,763
-
-
530
(405)
2,888
47,459
(55,391)
(375)
(669)
3,038
1,800
-
257
(128)
4,967
(5,250)
(8,864)
-
(689)
(8,976)
(14,803)
(6,088)
(9,836)
Annual Report and Accounts 2022 121
Value at 30 Value at 30 September September 2022 2021 £000 £000LDI/UK Gilts 14,915 54,245Equities 38,925 41,261Property Unit Trusts - -Diversified Growth Funds 58,640 62,034Other - -Cash instruments - -Cash and cash commitments 64 3,516Total market value of assets 112,544 161,056 Value at 30 Value at 30 September September 2022 2021 £000 £000Fair value of Scheme assets 112,544 161,056Present value of funded Defined Benefit Obligation (86,110) (142,295)Funded status and asset recognised on the balance sheet 26,434 18,761Related deferred tax liability (5,287) (3,752)Net pension asset 21,147 15,009
Notes to the Consolidated Financial Statements
for the year ended 30 September 2022
17 Pensions (continued)
Changes in Defined Benefit Obligation over the year
Opening defined benefit obligation
Current service cost
Interest expense on DBO
Contributions by scheme participants
2022
£000
2021
£000
142,295
149,323
2,763
2,937
450
3,038
2,354
465
Actuarial (gains)/losses on scheme liabilities arising from changes in financial assumptions
(55,391)
(8,864)
Actuarial (gains)/losses on scheme liabilities arising from changes in demographic assumptions
Actuarial (gains)/losses on scheme liabilities arising from experience
Net benefits paid out
Past service cost
Net increase in liabilities from disposals/acquisitions
Settlements
Closing defined benefit obligation
Changes to fair value of the Scheme assets during the year
Opening fair value of Scheme assets
Interest income on Scheme assets
Remeasurement gains/(losses) on Scheme assets
Contributions by the employer
Contributions by scheme participants
Net benefits paid out
Administration costs incurred
Net increase in assets from disposals/acquisitions
Settlements
Closing fair value of Scheme assets
Actual return on scheme assets
Interest income on Scheme assets
Remeasurement gain/(loss) on Scheme assets
Actual return on Scheme assets
Analysis of amounts recognised in OCI
Total remeasurement gains/(losses)
Change in irrecoverable surplus, effect of limit in paragraph 64
Total gain/(loss)
122
(375)
(669)
(5,900)
-
-
-
-
(689)
(5,132)
1,800
-
-
86,110
142,295
2022
£000
2021
£000
161,056
156,638
3,342
(47,459)
1,585
450
(5,900)
(530)
-
-
2,482
5,250
1,610
465
(5,132)
(257)
-
-
112,544
161,056
2022
£000
3,342
(47,459)
(44,117)
2021
£000
2,482
5,250
7,732
2022
£000
2021
£000
8,976
14,803
-
-
8,976
14,803
JERSEY ELECTRICITYFinancial Statements
17 Pensions (continued)
Discount rate sensitivity
To show the sensitivity of the results to the choice of discount rate, we have set out below the balance sheet and profit 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 2022
Following a 0.5% p.a. increase in the discount rate
Pension expense for the following year
DBO at 30 September 2022
18 Share capital
Change
New value
630
6,320
643
92,430
Change
New value
(601)
(5,673)
(588)
80,437
‘A’ Ordinary shares 5p each (2021: 5p each)
Ordinary shares 5p each (2021: 5p each)
5% Cumulative participating preference shares £1 each
3.5% Cumulative non-participating preference shares £1 each
Authorised
2022
Issued and fully paid
2022
Authorised
2021
Issued and fully paid
2021
£000
1,250
1,500
2,750
100
150
250
£000
582
950
1,532
100
135
235
£000
1,250
1,500
2,750
100
150
250
£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 2022 there were 11,640,000 ‘A’ Ordinary and 19,000,000 Ordinary shares in issue.
Preference shares
Preference shares are classified as financial liabilities under IFRS. Dividends paid to preference shareholders in the year were
£9,000 (2021: £9,000) and are recorded in finance 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 Benefit 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 2022, 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.
Annual Report and Accounts 2022 123
Notes to the Consolidated Financial Statements
for the year ended 30 September 2022
19 Non-controlling interests
Equity
20 Financial commitments
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:
124
JERSEY ELECTRICITYFinancial Statements 2022 2021 £000 £000At 1 October 158 123Share of profit on ordinary activities after taxation 140 136Dividends paid (154) (101)At 30 September 144 158Non-controlling interests represent 49% (2021: 49%) ownership of the issued ordinary share capital of Jersey Deep Freeze Limited. 2022 2021 £000 £000No later than 1 year 1,676 1,770Later than 1 year and no later than 2 years 1,254 1,546Later than 2 years and no later than 3 years 1,254 1,254Later than 3 years and no later than 4 years 1,206 1,254Later than 4 years and no later than 5 years 1,020 1,206Later than 5 years 10,257 8,624 16,667 15,654 2022 2021 £000 £000a Five year capital expenditure approved by the directors:Contracted 1,970 1,045Not contracted* 92,062 80,525 94,032 81,570*Although this sum is approved it is still subject to formal business cases being reviewed in due course.
22 Derivatives and financial instruments and their risk management
Categories of financial instruments
The carrying values of the financial assets and liabilities of the Group are as follows:
The primary financial 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 2022, taking into account the effect of forward contracts placed to manage
such exposures, was £2.4m (2021: £2.3m) being the translated Euro liability due for imports made in September but payable in
October.
All financial 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 financial instruments are those with values that are immediately comparable to quoted (unadjusted) market prices in
active markets for identical assets or liabilities;
Level 2 financial 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 financial instruments are shown at values that are determined by assumptions that are not based on observable market
data (unobservable inputs).
The derivative contracts for foreign currency shown above are classified as level 2 financial instruments and are valued using a
discounted cash flow valuation technique. Future cash flows 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 reflects the
credit risk of various counterparties.
Annual Report and Accounts 2022 125
Financial assets 2022 2021 £000 £000Fair value through other comprehensive incomeDerivative financial instruments 3,123 108Amortised costSecured loan accounts 300 308Trade and other receivables (excluding prepayments) 17,436 16,750Cash and cash equivalents 47,397 43,136 65,133 60,194 Financial liabilities 2022 2021 £000 £000Fair value through other comprehensive incomeDerivative financial instruments 330 2,130Amortised costBorrowings 30,000 30,000Trade and other payables 12,405 9,641Preference shares 235 235 42,640 39,876
Notes to the Consolidated Financial Statements
for the year ended 30 September 2022
22 Derivatives and financial instruments and their risk management (continued)
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 ineffectiveness 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 flows.
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
At 30 September 2022, the fair value of the Group’s currency derivatives is estimated to be a net asset of approximately £2.8m
over the next three years (2021: £2.0m liability). The fair value of currency derivatives that are designated and effective as cash
flow hedges amount to an asset of £2.8m (2021: £2.0m liability) 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 ineffective as cash flow hedges amount to £nil (2021: £nil). In the
current period amounts of £4.8m were debited (2021: £3.1m debit) to equity and £4.8m credit (2021: £3.1m 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
Commodity risk
Power purchases
The Group has power purchase agreements with EDF in France. As at 30 September 2022, the import prices, but not volumes,
have been substantially fixed for 2023. 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.
126
JERSEY ELECTRICITYFinancial Statements 2022 2021 £000 £000Derivative assetsLess than one year 483 -Greater than one year 2,640 108Derivative liabilitiesLess than one year (330) (1,256)Greater than one year - (874)Total net (liabilities)/assets 2,793 (2,022) 2022 2021 £000 £000Less than one year - operational expenditure 33,855 35,406Greater than one year and less than three years 48,804 49,850 82,659 85,256 2022 2021 £000 £000Net (liabilities)/assets at 1 October (2,022) 1,094Gross movement through consolidated statement of comprehensive income 4,815 (3,116)Net assets/(liabilities) at 30 September 2,793 (2,022)
22 Derivatives and financial instruments and their risk management (continued)
Credit risk
The Group’s principal financial 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 2022 outside agreed credit terms are as follows:
The credit risk on liquid funds and derivative financial 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 significant concentrations of credit risk.
For trading related receivables, the credit worthiness and financial 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 significant concentration of credit risk. Exposure is spread over a large number of counterparties and
customers with a maximum credit exposure of £26.6m (2021: £36.1m).
Expected credit losses provision
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which assesses if a material expectation
exists for lifetime expected loss allowances against all trade receivables based on historical realised write-downs. Where specific
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-offs 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:
Ageing of impaired receivables is as follows:
Annual Report and Accounts 2022 127
2022 2021 £000 £000Less than 30 days 1,194 1,736Greater than 30 days 304 585Greater than 60 days 156 181Greater than 90 days 366 403 2,020 2,905 2022 2021 £000 £000At 1 October 303 476Charge for expected credit losses - included within operating costs 25 43Amounts written back (25) (216)At 30 September 303 303 2022 2021 £000 £0000 - 30 days 9 7231 - 60 days 28 1261 - 90 days 16 7Greater than 90 days 250 212 303 303 Notes to the Consolidated Financial Statements
for the year ended 30 September 2022
22 Derivatives and financial 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
financial 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 five 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 profile of its assets, liabilities and commitments so
that cashflows are appropriately balanced and all financial obligations are met when due.
Maturity of financial liabilities at 30 September
Financial liabilities shown above include interest payments due on the £30m private placement.
Borrowing facilities
The Group had undrawn borrowing facilities at 30 September 2022 of £12.0m (2021: £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 five years.
Maturity of financial assets and liabilities
The financial assets of the Group comprise deposits placed with banks which all expire in less than one year. The maturity
profile of the Group’s financial assets and liabilities at 30 September was as follows:
Maturity of financial assets at 30 September
Interest rate risk
Interest rate exposure on the £30m of private placements borrowing is managed by having fixed coupons.
128
JERSEY ELECTRICITYFinancial Statements 2022 2021 £000 £000Less than 3 months: cash and cash equivalents and short-term investments 7,397 27,136Greater than 3 months: short-term investments 40,000 16,000 2022 2021 £000 £000Less than one year 22,782 21,041More than one year and less than five years 34,007 33,508More than five years 44,106 45,446 100,895 99,995 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 significant influence 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 significant value transactions with the Government during the year with the value of electricity
purchased from the facility during the year being £2.2m (2021: £1.2m) whilst the value of services provided to the plant was
£0.4m (2021: £0.4m).
Remuneration of key management personnel
The remuneration of key management personnel of the Group (which is defined as the Executive and non-Executive Directors) is
set out below.
Phil Austin, who is a non-Executive Director, is also a Board member of Ravenscroft Cash Management Ltd which provides
treasury services to Jersey Electricity plc. Such services are provided on normal contractual terms, similar to their other clients.
Annual Report and Accounts 2022 129
2022 2021 £000 £000Short-term employee benefits 739 717Post-employment benefits 102 170Non-Executive Director’s benefits 177 194 1,018 1,081 Five Year Group Summary (unaudited)
Financial Statements
Income Statement (£m)
Turnover
Operating profit
Profit before tax
Profit after tax
Dividends paid (£m)
Balance Sheets (£m)
Property, plant and equipment
Net current assets/(liabilities)
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
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
2022
2021
2020
2019
2018
117.4
11.9
10.6
8.5
5.5
216.2
51.5
(90.8)
239.4
27.2
21.8
17.4
1.6
17.4
10.4
613
-4.3%
95.3%
0.3%
4.4%
145
118.6
20.5
19.1
16.3
5.2
216.6
45.3
(87.5)
225.4
52.7
21.1
16.9
3.1
13.1
9.9
639
3.3%
95.2%
0.4%
4.4%
170
111.7
16.2
14.8
11.7
4.9
217.9
37.1
(83.0)
205.0
37.9
20.1
16.1
2.4
5.5
12.0
619
-1.2%
94.7%
0.2%
5.1%
141
110.7
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
105.9
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
52,473
51,912
51,522
51,103
50,561
5
14.5p
253
92
18
363
2,422
207
5
13.9p
238
88
21
347
2,686
218
5
13.6p
199
97
9
305
3,112
259
6
13.3p
188
94
11
293
3,336
272
6
12.9p
186
102
14
302
3,411
272
130
JERSEY ELECTRICITYFinancial Statements
Financial Calendar
3 January 2023
Preference share dividend
17 February 2023
Record date for final dividend
8 March 2023
Annual General Meeting
23 March 2023
Final dividend for year ended 30 September 2022
17 May 2023
Interim Management Statement – six months to 31 March 2023
2 June 2023
Record date for interim ordinary dividend
20 June 2023
Interim dividend for year ending 30 September 2023
3 July 2023
Preference share dividend
20 December 2023
Announcement of full year results
Annual General Meeting
The Annual General Meeting will be held at the Powerhouse, Queens Road, St. Helier, Jersey on Wednesday 8 March 2023
at 2:00pm. 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).
Annual Report and Accounts 2022 131
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.