Inspiring
a zero-carbon
future
Annual Report and Accounts 2024
Jersey Electricity Plc is the sole supplier of electricity in Jersey,
serving around 54,000 residential and business customers.
The Company’s operations include the generation, importation,
transmission, distribution and supply of electricity as well as
a range of energy related services and solutions.
Inspiring a
zero-carbon future
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
Chief Executive
BA, MEng, CDipAF,
CEng, MIMechE, MBA
Lynne Fulton
Chief Financial Officer
BA (Hons), ACCA
SECRETARY
Andrew Welsby
BA, MA, FCPID
REGISTERED OFFICE
Queen’s Road, St. Helier, Jersey
Registration No.67
PLACE OF INCORPORATION
Jersey Electricity Plc (‘the Company’)
and Jersey Offshore Wind Limited and
Jersey Deep Freeze Limited (together
‘the Group’) are incorporated in Jersey.
INDEPENDENT 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
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
2
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
3
JERSEY ELECTRICITY Annual Report and Accounts 2024
Contents
Powering the moments that matter for 100 years
4
How we performed in 2024
6
STRATEGIC REPORT
Chair’s Review
8
Chief Executive’s Review
12
Our Purpose, Vision and Values
16
Our Strategy
18
Our Business Model
20
Understanding our stakeholders
22
Sustainability at JE
30
Business Unit Review
36
Energy
38
Home and Business
42
Other Businesses
46
Technology
48
Financial Review
50
Group Risk Management
56
Climate Related Disclosures
68
DIRECTORS REPORT
Board of Directors
78
Directors Report – for the year ended 30 September 2024
82
Nominations Committee Report
86
Audit and Risk Committee Report
90
Remuneration Committee Report
94
FINANCIAL STATEMENTS
98
Other information
136
HELP US CUT PAPER
Printing of this Annual Report is carbon balanced, with trees
planted to help offset the climate impact of its production.
While Jersey Electricity Plc has sought to reduce the
environmental impact of this publication as far as possible,
we encourage readers to opt out of receiving printed copies
and make use of our website, jec.co.uk/investors, to reduce
material and resources used.
Powering the moments
that matter for 100 years
Jersey Electricity reached 100 years old in 2024.
Over the past century, we have become so much more than just an electricity provider.
We have become an energy services partner to the Island, we have adapted and grown,
in partnership with our community, as our energy needs have evolved.
While the way we have generated the energy that feeds our homes,
schools and public services has changed, we have stayed true to our north star of safely
providing secure, reliable and affordable electricity.
E S TA B L I S H E D 1 9 24
1920s
Establishing an
Island’s supply
JE establishes the Island’s
power supply with the
ambition to bring light and
warmth to every Islander.
Our first power station is
located at Albert Pier, now
Liberty Wharf.
1930s
Moving to a new
power station
We move to larger
premises at Queen’s Road
where we can generate
power in greater volume
to meet demand for
electricity. The mains
network is extended
to every parish.
1940s
The occupation
stalls expansion
The occupation stalls
expansion and supplies
are rationed. We resume
control of Queen’s Road
power station on VE Day.
1950s
Electric cookers
fuel our growth
A decade defined by
diversification, we
start selling electrical
equipment and customers
first benefit from cheaper
tariffs for water and off-
peak storage heating.
1960s
La Collette and
stock market listing
La Collette Power Station
is built to increase
generation capacity.
The building is funded
through listing the
Company on the London
Stock Exchange in 1963.
4
JERSEY ELECTRICITY Annual Report and Accounts 2024
1970s
Growth, growth,
growth
Operational employees
moved out of Queen’s
Road and into La Collette,
which is expanded to
accommodate more
generating equipment.
1980s
A director’s vision
comes to fruition
We begin importing low
carbon energy from France
as EDF1 – our first subsea
cable – is commissioned
and built, a bold strategic
decision which virtually
decarbonises our
electricity.
1990s
A link between
Islands
After great discussion,
a deal is struck with
Guernsey Electricity to
link them into the French
connection via Jersey,
creating the Channel
Islands Electricity Grid
(CIEG) joint venture.
2000s
A decade
for doing
A second cable from
Jersey to France is laid,
accompanied by the first
cable connecting Jersey
and Guernsey, while
significant infrastructure
investment takes place to
reinforce the local network.
2010s
Jersey’s low
carbon future
With two new submarine
cables to France
completed, our renewables
and low-carbon transport
strategies advance with
the Powerhouse’s first
solar array and expanded
public EV charging
network.
5
JERSEY ELECTRICITY Annual Report and Accounts 2024
Clockwise from left: La Collette Power Station,
St Clement solar array, Community beach
clean, and Storm Ciarán clean up operation
2020s
Innovation
and community
How we
performed
in 2024
Our Key Performance Indicators
(KPIs) are quantifiable measurements
which help gauge overall performance
and guide our decisions on our
operations and strategy.
6
JERSEY ELECTRICITY Annual Report and Accounts 2024
£135.7m
REVENUE
609m
UNIT SALES OF
ELECTRICITY
£15.1m
PROFIT BEFORE TAX
24.85
CO2 LEVEL
(gCO2e/kWh)
19.80p
ORDINARY DIVIDEND
PER SHARE
9.5*
CUSTOMER
MINUTES LOST
77.5
CUSTOMER
SERVICE SCORE
6.3%
RETURN ON ENERGY
ASSETS (5-YEAR
ROLLING AVERAGE)
34
EMPLOYEE NET
PROMOTER SCORE
7
JERSEY ELECTRICITY Annual Report and Accounts 2024
*Excludes Storm Ciarán Network Impact
8
JERSEY ELECTRICITY Annual Report and Accounts 2024
Chair’s
Review
In our centenary year, Jersey
Electricity has continued to deliver on
its promise to ‘enable life’s essentials’
and create value for Islanders
and shareholders. At the same
time, through our net zero focused
strategy we have begun a significant
programme of investment, playing our
part in Jersey’s transition to net zero.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
9
JERSEY ELECTRICITY Annual Report and Accounts 2024
Phil Austin MBE oversees a team of
experienced Executive and independent
Non-Executive Directors. Together they
provide strategic leadership coupled
with strong corporate governance to
support the long-term success of the
Company.
One Hundred Years of Service
In this, our centenary year, we have taken time to reflect on the
significant achievements of Jersey Electricity over the past 100
years, from its formation in 1924 at Albert Pier, to the move to the
Queen’s Road Power Station in 1964, the formal opening of La
Collette in 1973 and the first undersea cable to France in the mid
1980s – all of these developments followed pivotal and bold
decisions, which have served the Island well. Throughout the last
century, Jersey Electricity has been at the heart of the Island’s
transformation, empowering our communities and championing
sustainability through resilience and visionary thinking.
Performance
Whilst, in operational terms, the 2023/24 year got off to a very
difficult start with Storm Ciarán, the performance of the Group,
throughout the year was a good one.
The ongoing Russia – Ukraine war and the rising tensions in
the Middle East continue to create uncertainty in the energy
markets and, despite some easing during the year, along with
falling inflation, they remain unstable and above historical levels.
Revenue for the Group rose 8.5% in the year to £135.7m,
producing a Profit Before Tax of £15.1m. Unit sales of electricity
remained flat, with growth in connections and fuel switches
being offset by efficiencies. Our Energy Business delivered
a Return on Assets of 7.3% in year, delivering an on target
performance of 6.3% on a rolling five year basis.
All our other businesses continued to perform in line with
expectations.
The Board has recommended a final dividend for the year
of 12.00p, a rise of 5.3% on the previous year, payable on
14 March 2025.
£135.7m
GROUP REVENUE
£15.1m
PROFIT BEFORE TAX
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Strategic Investment: net zero readiness
An investment of £180m is planned over the next five years
to improve the energy network and services. This year, ‘The
Big Upgrade’ began on the electricity network, with a £120m
investment programme aimed at strategic asset replacement
and network reinforcement, ensuring both network health and
capacity are ready for net zero. Additionally, a £30m resilience
programme commenced at La Collette to significantly increase
supply security for the Island. Our renewable strategy continues
to progress on-Island whilst we remain in discussion with the
Government of Jersey (GoJ) about what role Jersey Electricity
could play if they proceed with an offshore wind project.
Our first on-Island utility-scale solar array is currently under
construction, with commissioning planned for January 2025.
Corporate Governance
The UK Corporate Governance Code 2018 requires the Board
to set key areas of focus for the year. In 2024 these included:
1.
Working with stakeholders, planning for and making
demonstrable progress toward Jersey’s net zero goal, whilst
contributing to reduce the Company’s own carbon footprint.
2. Continuing to address affordability by helping customers
with energy efficiency and delivering our products and
services as sustainably, and at as low cost, as possible.
We have made good progress in both areas and more details
are provided throughout this report, see pages 30 to 45.
There are also reports from the Nominations Committee,
Audit & Risk Committee and Remuneration Committee
on pages 86 to 97.
The Board determined its key areas of focus for 2025 as follows:
1.
Continue to progress towards Jersey’s net zero goal and
continuing to reduce the Company’s own carbon footprint.
2. Continue to support customers with energy efficiency,
ensuring our stakeholder outcomes are safe, reliable,
affordable and sustainable energy services.
10
JERSEY ELECTRICITY Annual Report and Accounts 2024
Chair’s Review (continued)
“I am proud of the work JE
does in pursuit of its purpose
and together, with the
Board, confident that the
Business will play a pivotal
role in supporting Jersey’s
sustainable future.”
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
11
JERSEY ELECTRICITY Annual Report and Accounts 2024
Senior Appointments
The tenures of Alan Bryce, our Senior Independent Director and
Chair of the Nominations Committee, and Wendy Dorman, Chair
of the Audit & Risk Committee, will conclude in December 2024
and July 2025, respectively. To ensure a seamless transition,
we have undertaken a competitive recruitment process, led by
independent search consultants, and I am delighted to welcome
to the Board, with effect from 1 October 2024, Iman Hill and
Roger Blundell, both experienced directors with broad industry
and commercial backgrounds.
I would like to thank Alan and Wendy for their significant
input during their time on the Board. Jersey Electricity has
gone through substantial change during their tenure and their
experience and guidance has played a big part in its success.
Thank You
In looking back over 100 years of operation, it is amazing to see
the how the Company has developed into what it is today – the
brave, and sometimes bold, decisions that were taken along the
way, and the life-changing technological improvements which
could never have been anticipated. Throughout all of that,
though, there has been a constant – the dedication, expertise
and passion of our staff to provide the best service possible to
our customers, at all times. For that, we thank employees, past
and present.
Finally, I would like to extend my thanks to my fellow Directors for
their support and expertise. It is very much appreciated.
Chair’s Review (continued)
“Our first utility scale solar
array will be commissioned
in January 2025, delivering
up to 4MW of renewable
power to the grid. This is the
first of our large scale projects
focused on increasing energy
sovereignty and long-term
supply diversity.”
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
12
JERSEY ELECTRICITY Annual Report and Accounts 2024
As the challenge of decarbonisation becomes increasingly
urgent due to global warming, the need to ensure Jersey
continues to have a safe, reliable, affordable and sustainable
energy system becomes all the more imperative. Jersey
Electricity plays a significant role in supporting the Island’s net
zero ambitions and has committed to achieving net zero by
2040. In 2023/24, we focused on three major areas to ensure
these goals are met; firstly network investment branded
“The Big Upgrade” focusing on transmission and distribution;
secondly supply security and backup which advanced the La
Collette Resilience Project; and finally long term clean, green
energy which made significant progress in developing on-
Island solar as well as advancing our strategy around offshore
wind. The flexibility of the Group’s business model allows
investment to be targeted to have the greatest impact on net
zero as well as create the most value for all stakeholders.
Chief
Executive’s
Review
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
13
JERSEY ELECTRICITY Annual Report and Accounts 2024
2023/24 has been an unprecedented year for
Jersey Electricity. We launched a major strategic
programme to ensure our infrastructure remains
safe, reliable, affordable, and sustainable,
supporting Jersey’s net zero transition. During
Storm Ciarán our operations and infrastructure
showed great resilience, and I am very proud,
not only of the JE team but also the whole
community in the way it responded.
£13.0m
ENERGY BUSINESS
PROFIT
£108.1m
ENERGY REVENUE
The progress described in these pages is largely due to the
efforts of our JE team, which includes our skilled colleagues,
suppliers and partners. Ensuring a safe, healthy and inclusive
working environment for our colleagues and contractors
remains our primary priority.
Affordability
Although the wholesale energy market has shown signs of
stabilisation in 2024, prices are still above historic levels and the
overall economic environment remains challenging.
Despite the continued and significant upward pressure on
our importation costs, we have been able to greatly shelter
our customers from the significant prices rises experienced
elsewhere. Since the Russian invasion of Ukraine we estimate
that customers in Jersey avoided around £200m of costs that
they would have faced elsewhere.
However, we have not been completely immune from increasing
costs and in January 2024 we implemented a 12% increase
in tariffs, with a further increase of 7.5% to be implemented in
January 2025. We have worked hard to ensure any increase
in prices are kept as small as possible and our standard
domestic tariff continues to benchmark well compared to other
jurisdictions with UK price capped tariffs being around 50%
higher than Jersey’s equivalent tariff.
Our importation contract with EDF continues to perform well
and I am pleased that we have been able to materially hedge
Jersey’s remaining electricity requirements through to the end
of 2027, reducing our risk to further volatility in the wholesale
market significantly. Our contractual arrangements with EDF to
supply electricity ends in December 2027 and our negotiations
to secure competitive contractual arrangements from January
2028 are well progressed.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
14
JERSEY ELECTRICITY Annual Report and Accounts 2024
Chief Executive’s Review
*Excludes Storm Ciarán
“The majority of our electricity
needs are now largely
hedged through to the end
of 2027, significantly reducing
our exposure to further
volatility in the wholesale
market. However, continuous
monitoring of the market
remains essential.”
Financial Performance
2023/24 was a solid year of financial performance. Group
Revenue for the year to 30 September 2024 increased year-
on-year by 8.5% to £135.7m, assisted by the 12% tariff increase
implemented in January 2024. Group Profit Before Tax at £15.1m
this year was broadly in line with last year’s level of £14.9m.
We imported around 95% of Jersey’s electricity requirements
from France with the remainder from on-Island sources. This
resulted in an average carbon intensity of distributed energy
of 24.85 gCO2e/kWh.
Unit sales of electricity of 609 million, represented a slight
increase above 2022/23 of one million units. Although we
continue to see underlying growth in connections and fuel
switching to electricity, this is largely offset by efficiency in
usage of electricity. This reflects our strategy to encourage
energy efficiency by offering free monitoring services such
as those facilitated by the MyJE app whilst at the same time
encouraging new customer-product relationships such as
electric transportation and electrified heat solutions.
Network Investment (“The Big Upgrade”)
This programme represents our largest investment programme
we have undertaken for some years. ‘The Big Upgrade’ will
see JE investing £120m in the electricity network over the next
five years.
Jersey already has a highly resilient, low-carbon grid, with
spare capacity at all voltages. Although demand is currently
falling as energy efficiency gains outstrip demand growth,
we forecast a 25% increase in peak demand to meet the
Island’s net zero 2050 target.
The investment programme is aimed at ensuring JE delivers
subsea cable replacements, transmission and distribution asset
replacement and increases generation capabilities that support
Jersey in its transition to net zero. As part of this programme we
have accelerated the replacement of our oldest subsea cable,
as it has started to show signs of deterioration. See page 38 for
more details.
Supply Security
Jersey has an enviable record of supply security. 2023/24 has
delivered a customer minutes lost of 9.5* (2023:4.0) and customer
interruptions of 19.3* (2023: 4.4).
Last year we advised that we had undertaken a comprehensive
review of our Security of Supply Standard, prompted by the
energy crisis (driven by Russia’s war on Ukraine), the demands
of the Carbon Neutral Roadmap and the 2021 French fishing
dispute. The review resulted in the Board’s approval of the La
Collette Resilience Programme, a critical programme which will
ultimately lead to the installation of new Gas Turbines at the site
to provide an additional 50MW of capacity.
The programme commenced this year with work to prepare
the site for construction. The programme is expected to take up
to four years at an estimated cost of £30m and will lead to the
formal adoption of the enhanced Security of Supply Standard
by summer 2028.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
15
JERSEY ELECTRICITY Annual Report and Accounts 2024
Chief Executive’s Review (continued)
Long Term Green, Clean Energy
Our strategy is to import competitively priced low carbon
power from France, from nuclear and certified hydro-electric
sources alongside the development of diversified, indigenous
renewables as they become economically viable. In addition to
importing power from France, we are continuing to work hard to
reduce the costs of Island sourced renewable energy to make
them a meaningful and viable alternative component in the mix,
as we build further on our knowledge and capabilities.
Offshore Wind
During the last year we have continued to explore Offshore
Wind including examining how it might be optimised in Jersey’s
energy system, possible roles for JE and how we might helpfully
partner with the Government of Jersey. We have regularly
engaged with the Government’s Future Energy Group, a
subcommittee of the Council of Ministers, as well as with
potential partners, to explore how the proposals can be most
effective for Jersey.
On-Island Solar
During year we launched our Solar 5000 campaign. This
represents our goal to power the equivalent of 5,000 homes
with solar power by 2030. We are hoping to achieve this based
on a mix of utility scale ground mounted solar arrays supported
by continued parallel investment in rooftop solar.
We are finalising construction of our first utility scale ground
mounted solar array in St Clement. The array will deliver 4MW
of energy and is scheduled to be commissioned in early 2025.
With planning permission now in place for the next array in
the north of St John’s on the edge of Sorel, we expect to start
construction imminently and commission later in 2025.
Stakeholders
Our Customers and Community
Our customers and our community are at the heart of everything
we do.
In 2024 we achieved a customer satisfaction score of 77.5,
placing JE second amongst a peer group of 35 other electricity
and water utilities. This is an excellent position, but we do not
take this for granted and we know there is more to be achieved.
This year we have launched our “Think Customer” initiative.
This initiative represents an investment in improving people
skills, processes and systems to ensure that the Company is fully
equipped to deliver a consistent customer experience across
the group.
We have continued to support the community and NGOs
throughout the year with active involvement in more than
40 community projects and initiatives across the Island.
Government
During the year, and at the request of Government, we have
continued to support the administration of the Low Carbon
Heating Incentive Scheme (LCHI) as well as a similar scheme
for the purchase of electric vehicles.
We continue to work closely with the Government to support
the delivery of the Carbon Neutral Roadmap (CNR) and delivery
of the Island’s net zero goal by 2050.
Our People
Our people are crucial for achieving our vision of a zero-carbon
future. Our success relies on a committed, engaged and capable
workforce. Developing a diverse team with an inclusive culture,
where everyone feels valued and supported to reach their full
potential, is a key strategic priority. During the year we migrated
to a new employee engagement system and the results from this
were a pleasing top quartile performance relative to UK Energy
and Utilities peers with an ePNS score of 34 and a response rate
of 75%. We nevertheless are striving hard to incorporate the very
best practice and continue to better ourselves.
Our Shareholders
Through our strategy, which aims to achieve financial resilience,
we deliver a stable, reliable return for our shareholders. This year
our Return on Assets for the year was 7.3%, which represented
6.3% on a 5 year rolling basis, in line with target. We increased
our dividends by 5.3% .
Outlook
Although the macro-economic environment is easing, it remains
challenging. Geopolitical uncertainty persists with the ongoing
conflict in Ukraine and escalating tensions in the Middle East,
contributing to instability in the global energy market.
The majority of our energy volumes are now largely hedged
through to the end of 2027, significantly reducing our exposure
to further volatility in the wholesale market. However, continuous
monitoring of the market remains essential.
Our focus will be on supporting our customers in achieving
maximum energy efficiency and on developing new products
and services that can facilitate the transition for customers
from fossil fuels to sustainable low-carbon electricity at an
affordable price.
The next twelve months will present both challenges and
opportunities for the Group. We are aiming to complete our
post-2027 importation contract by the end of the financial year
and will continue to explore potential synergies with offshore
wind post-2032.
With continued emphasis on our strategic programmes, the
coming year will see us advance our infrastructure investment
programmes, increase local renewables penetration, expand
product offerings for fuel switching and leverage digital
innovation to enhance operational efficiency.
Jersey Electricity’s people, assets and businesses play a central
role in the community, adding significant societal value to the
Island. This presents an enormous opportunity for Jersey to
benefit Islanders at a local level and demonstrate leadership
within the international community.
We have an ambitious agenda and much work ahead,
but we are well-positioned to continue delivering safe, reliable,
affordable, and sustainable services now and long into the
future.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Our Purpose is to ‘enable life’s essentials’ by providing the people of Jersey with safe,
reliable, affordable, and sustainable services today and long into the future.
Our Purpose
Purpose, Vision and Values
16
JERSEY ELECTRICITY Annual Report and Accounts 2024
Lifestyle
We aim to enhance
Islanders’ lifestyles and
power the economy
by providing innovative,
low-carbon energy
services and solutions.
Environment
We support the
Government of Jersey’s
Carbon Neutral Roadmap
by growing electricity’s
share of the energy market
and reducing carbon
emissions, helping to
conserve resources and
protect the environment.
Customers
We put customers at the
heart of our business,
giving them choice,
control and value for
money in a transparent
and trusted way.
Our People
We aim to be an employer
of choice in Jersey,
where employees are
engaged, supported
and developed.
Partnerships
We aim to be the
partner of choice for the
Government of Jersey
and the Island’s parishes,
supporting all their
energy needs.
Investors
We provide a fair return
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.
Our Vision is to ‘inspire a zero-carbon future’ by being the energy partner
of choice whilst working to seven key success factors of that Vision.
Our Vision
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Our Values
17
JERSEY ELECTRICITY Annual Report and Accounts 2024
Customer Focus
We listen to our
customers and seek
to understand and respond
to their needs, treating
them the way we would
be wish to be treated, with
respect and honesty.
Excellence
We continually strive
to work in a way that
is both innovative and
simple to deliver cost
efficient solutions.
Reliability
We are trustworthy,
dependable and
reliable, delivering on
our commitments and
always there when our
customers need us.
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.
Teamwork
We value diversity,
respect and value our
colleagues as individuals.
We believe we are a
stronger as a team,
leading to better solutions
and a more enjoyable
and rewarding work life.
Responsibility
We accept responsibility
for everything we do,
safeguarding the natural
environment and the
local community, as well
as the interests of all our
customer and people.
Our six core Values are key to our culture. They guide the behaviours
we expect of each other as we work together towards our Vision.
Our Values
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
18
JERSEY ELECTRICITY Annual Report and Accounts 2024
Our Strategy
Our strategy has for many years been
to supply low carbon electricity to
homes and businesses on the Island,
whilst maintaining competitive prices
and delivering long-term stable
returns for shareholders. Our strategy
is designed to meet our four key
stakeholder outcomes to deliver a safe,
reliable, affordable and sustainable
service that delivers a great customer
experience, throughout all our
businesses and operations.
Climate change affects everyone and the transition towards
net zero is rapidly evolving. At Jersey Electricity, we understand
that sustainability goes beyond net zero, focusing on
maintaining an ecosystem that’s sustainable for today,
tomorrow and the long term.
Our strategic priorities are focused on not just achieving net zero
within our own operations but also embracing our crucial part
in supporting Jersey’s overall transition to net zero. Our focus is
on driving progress towards net zero by developing, building,
and operating clean, green, secure and affordable electricity
infrastructure that delivers the needs of today and the future.
We aim to offer comprehensive ‘beyond the meter’ solutions
that facilitate customers moving to a low-carbon future at an
affordable price.
To summarise, our strategic priorities deliver a sustainable
transition to a decarbonised future that provides value
and benefit to all our stakeholders.
Our Strategy
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
19
JERSEY ELECTRICITY Annual Report and Accounts 2024
Key resources critical to success
Employees
The success of our strategy is dependent on the talent, diversity, innovation
and values of the people we employ.
Customers
We must ensure that we deliver a great customer experience that meets
our customers’ requirements not just for today but over the long term.
Maintaining our customers’ confidence by delivering a safe, reliable,
affordable service over the long term is vital in ensuring our customers have
sustainability. We aim to always deliver the right solutions, in the right way.
Communities and society
We need the support of the communities we work in and the backing
of society to deliver a sustainable decarbonised future.
Government
Our relationship with government as policy maker as well as shareholder
is critical to maintain momentum behind our strategy.
Natural environment
Using the Island’s natural resources to build renewable sources of energy
as well as building and delivering products and services that are themselves
sustainably sourced is critical to our success.
Shareholders
Maintaining a sound approach to managing risk and sound finances
enables us to remunerate shareholders appropriately to support the
investment required to deliver our strategy.
Partners, suppliers and contractors
We rely on a healthy, on and off Island supply chain that can support our strategy.
Our priorities are:
• Create value of all stakeholders,
by providing fair pricing for customers
and fair return for shareholders
• Deliver a well-invested network,
a highly skilled, diverse and engaged
workforce committed to a zero-carbon
future
• To enable customers to convert
domestic and commercial premises
to value-for-money, low-carbon
electric heating and cooling solutions.
• Provide integrated ‘beyond the meter’
services that put customers at the
heart of the energy system.
• Develop affordable local renewable
energy solutions.
• Lead in the application of technology
to benefit customers by providing new
and improved services and driving
efficiency in our businesses.
• Provide private and public electric
vehicle networks to enable a
convenient solution that encourages
cleaner, more efficient, electric
transport.
Stakeholder Outcomes
Safe
Our services, networks
and businesses put the
safety of the public,
our customers and our
people first.
Affordable
Affordable services
that our customers value.
Reliable
Energy and associated
services that our
customers can rely on.
Sustainable
Our services, networks
and businesses are clean,
green and sustainable
for today, tomorrow
and the long term.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
20
JERSEY ELECTRICITY Annual Report and Accounts 2024
Our Business Model
Our
Business
What We Do
How We Create Value
Energy
Business
Generation
Our generation plant located at
La Collette and Queen’s Road provide
resilience to the Island in emergency
circumstances
Our renewables strategy is focused
on supporting our generation and
importation strategy by developing on
and off Island capabilities providing
additional resilience and creating long
term energy stability.
Our Energy Business seeks to deliver
a sustainable ‘return on assets’ (ROA)
to our shareholders, that enables the
Company to continue to invest for the
future needs of our infrastructure.
We target a ROA of 6%-7% over
a rolling five-year basis.
Importation
We import low carbon electricity
from France through three submarine
cables. This enables JE to readily
access the European supply market
creating resilience now and in the
longer term.
Transmission
and
Distribution
Ensuring a safe and resilient service
our transmission and distribution
assets create long term value for all
stakeholders.
Supply
Providing secure metering services
and developing optimal tariff
structures. Our smart meters provide
accuracy and assist us and our
stakeholders in understanding energy
demands.
Home
and
Business
Beyond the
Meter Services
Enabling customers to transition to
cleaner, more energy efficient living
we provide solutions to homes and
businesses for heating and support our
customers in being energy efficient.
Retail
Our Retail business provides quality
electrical goods at competitive
prices. Our large stock means we can
respond quickly to Islanders’ needs
and supports our smart living ambition.
Our complementary businesses
operate at arm’s length from the
Energy Business and provide
commercial services to Jersey and
beyond. Our risk management
framework detailed on p58 helps
us meet our strategic, financial and
operational objectives, enabling us
to take measured risks to incentivise
innovation and growth.
JEBs, Jersey
Energy and
Property
Provide building and consultancy
services that complement our core
energy and retail business.
Technology
Jendev
Provides comprehensive digital
Enterprise Resource Planning (ERP)
solutions across all business domains,
EV private and public network and
solutions.
Our Business Model
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
21
JERSEY ELECTRICITY Annual Report and Accounts 2024
390
JOBS FOR ISLANDERS
27.2k
MYJE APP
DOWNLOADS
41
COMMUNITY
PROJECTS
6.3%
RETURN ON ASSETS ON
5 YEAR ROLLING BASIS
239
SWITCHES FROM FOSSIL
FUEL TO ELECTRIC
53,726
CUSTOMERS SERVED
c300
SUPPORT TO REGISTERED
VULNERABLE CUSTOMERS
JE Home and Business
JE Energy
JE Technology
Safe
Reliable
Affordable
Sustainable
A great Customer Experience -
delivered by great people
441
JERSEY SUPPLIERS
AND PARTNERS
The
value we
create
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
22
JERSEY ELECTRICITY Annual Report and Accounts 2024
Understanding
our stakeholders
The Board prioritises enhancing stakeholder involvement to
adapt to the changing business landscape. Understanding
stakeholder influence and responding effectively is crucial for
our business, underscoring our customers’ central role. Engaging
with stakeholders helps us address their needs better, creating
mutual value for Jersey Electricity and the community.
Our stakeholders include individuals and organisations with
an interest in our Purpose, Vision, operations, and actions, or
those affected by them. As Jersey’s sole low-carbon electricity
provider, we have a broad range of stakeholders: customers,
suppliers, partners, NGOs, government entities, parishes,
regulatory agencies, lenders, investors, and employees.
Outcomes
Providing safe, reliable, affordable, and sustainable energy
are key outcomes required by our stakeholders. Our prices are
among the lowest in Europe, while delivering steady growth for
shareholders. We ensure the Island’s energy infrastructure is fit
for now and the future.
During 2024 we have conducted over 300 stakeholder
engagements, helping those affected by our business to better
understand Jersey Electricity and our Vision.
The cost-of-living crisis is a major challenge affecting many.
This economic strain underscores the need for clear, proactive
communication and collaboration with stakeholders. We
acknowledge our increased responsibility during these times.
In addition to affordability, stakeholders have raised concerns
about reliability and sustainability. Board members and senior
managers frequently discuss with government ministers and
officials topics such as the Island’s current and future energy mix,
the importance of, and investment needed for, supply security,
and the role in helping Jersey achieve net zero by 2050.
Our approach to sustainability and our sustainability frame
work is detailed on pages 30 to 35.
“As low carbon electricity becomes Jersey’s
primary energy source for net zero, stakeholder
engagement will become increasingly important.”
Chris Ambler, CEO
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
23
JERSEY ELECTRICITY Annual Report and Accounts 2024
Community
Customers
Government
Our People
Energy
Industry
Partners
• Workshops
• Corporate website
• Stakeholder meetings
• Social media
engagement
• My JE app
• Customer forums
• Focus groups
• Marketing platforms
• Surveys
• Advisory committees
• Media engagement
• Sponsorship
• Contact centre
• Newsletters
• Events
• Fact sheets
• Research
• Thought pieces
• Internal comms
& townhalls
• Briefings
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
24
JERSEY ELECTRICITY Annual Report and Accounts 2024
Our success depends on our employees.
We need to attract, engage, support,
motivate, and retain talent.
Diversity, Equity and Inclusion
We have continued to build on achieving ‘Established’/’Bronze’
status in the maturity audit conducted by our Diversity, Equity
and Inclusion (DE&I) partners Inclusive Employers.
Our immediate goals are to continue to progress the
development of a fully diverse and inclusive culture.
Our DE&I Working Group, comprised of people with a protected
characteristic, has met three times this year to help promote
our inclusive culture internally and embed it across the entire
workforce. This summer we held our first culture day, where
all members of the organisation shared food (and some also
dressed) representing their local cuisine.
Externally, we were gold sponsor for the third year of the
Channel Islands Pride event further demonstrating our
commitment to DE&I to the wider community as well as
our own people.
Workforce development
Ensuring we have the right talent and capabilities in the right
place at the right time is vital for future success and requires
much forward planning. We welcomed seven new apprentices
in construction roles in our Energy business this year, and
recruited two additional bursary students, bringing the total
to five, including our first ‘digital’ bursary student who will be
completing work placements in our technology department.
Evaluating and developing our management capabilities
has been a focus to ensure professional development and
aid succession planning. We continue to develop our Senior
Leadership to build leadership and management capability
at senior level through coaching, mentoring and professional
qualifications.
People
Understanding our stakeholders (continued)
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
25
JERSEY ELECTRICITY Annual Report and Accounts 2024
Supporting employees to speak up
The foundation of a healthy business culture is one where
everyone feels confident to report any concerns of wrongdoing
without fear of repercussion, and where issues identified are
dealt with quickly and appropriately. JE encourages employees
to speak up and they are protected from any adverse impact
of doing so. The number of reports of suspected wrongdoing
has increased in 2023/24, with three reports made through JE’s
speak up channels, compared to none the previous year. This
increase is partly a result of a concerted effort to make the
reporting process simpler and accessible and is to be expected
with a growing employee population.
Engagement
A key way to measure how healthy a business culture is,
is through listening to employee feedback. Through this, JE
can take appropriate action to improve employee experience
where possible. Our Culture and Engagement Forum, created in
2020 and made up of employees from across the business, met
four times this year, with rotating Board member participation,
to discuss how we run the business, our strategies, and
opportunities to improve how we work.
“Ensuring we have the right
talent and capabilities in the
right place at the right time
is vital for future success
and requires much forward
planning.”
Andrew Welsby,
People and Culture Director
Understanding our stakeholders (continued)
24
NATIONALITIES
REPRESENTED
16
APPRENTICES
12
YEARS AVERAGE
SERVICE
24/76%
FEMALE / MALE
GENDER DIVERSITY
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
26
JERSEY ELECTRICITY Annual Report and Accounts 2024
Engagement with our customers
demonstrates the requirements for JE
to provide an efficient service that is
reliable and resilient with a high-quality
customer service when there is a need
to contact us.
We appreciate the essential role we play in our customers’ lives
and putting customers at the heart of our business ensures we
have continued focus on increasing the maturity of our customer
experience. Operational performance in JE is excellent and we
want to enhance this by ensuring that customer touch points
and the products we develop provide a consistent customer
journey in each part of the Group.
In 2024 we achieved a customer satisfaction score of 77.5,
placing JE second, when compared to 35 other utility businesses.
This is an excellent position, but we do not take this for granted.
There is more to do.
This year we have launched our Think Customer initiative. This
initiative represents an investment in improving our systems,
processes and providing our people with the tool kits to deliver
a consistent customer experience across the Group.
We continued to engage with our customers through focus
groups and our customer insights surveys. These communication
channels enable customers to voice their priorities as well as
enable JE to communicate our investment plans. It’s important
that customers understand that JE’s plans and investments are
aimed at caring for the Island now and in the future.
Customers
77.5
CUSTOMER
SATISFACTION
SCORE
2nd
OUT OF 35
UTILITIES
Understanding our stakeholders (continued)
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
27
JERSEY ELECTRICITY Annual Report and Accounts 2024
In 2024, we developed the
“100 Projects that Matter” initiative,
a programme designed to support
not-for-profit organisations, charities,
registered community groups,
and schools. The initiative was
officially launched in November 2024.
Reflecting our continued dedication
to the local community, with a focus
on projects that align with education,
health, diversity, equity and inclusion
as well as the environment.
Community
and NGOs
Highlights from 2024
National Trust Education Programme
We continued sponsoring the National Trust for Jersey’s
Education Programme, funding a full-time Education Officer
and activities that help children reconnect with nature and
learn about the environment.
Primary Engineer
As an Industry Partner of the Primary Engineer initiative, we
supported STEM education through mentoring, judging, and
hosting grading days at our Powerhouse HQ as part of the “If
You Were An Engineer, What Would You Do?” Competition.
Child Accident Prevention (CAP)
- Safety in Action Week
JE employees volunteered to deliver safety workshops to
around 1,000 children at Highlands College, focusing on
home and electrical safety.
The Samaritans
We funded the installation of a low-carbon electric heating
system at the Samaritans’ headquarters, supporting their
vital work with vulnerable Islanders.
Recognising Environmental Excellence
We proudly sponsored the Environmentalist Award at the
Pride of Jersey Awards, honouring local contributions to
environmental conservation.
Grands Vaux Summer School
We supported the Grands Vaux Summer School, offering
enriching activities for local children during the summer.
Understanding our stakeholders (continued)
Product Manager Reka Wilson introduces King Charles to JE’s public
EV charging solution Evolve.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
28
JERSEY ELECTRICITY Annual Report and Accounts 2024
Government
Understanding our stakeholders (continued)
Throughout 2024 we have continued
to work closely with the government
in many areas. Together, we have an
instrumental role in addressing the
challenges for Jersey to meet net zero
and the delivery of the Carbon Neutral
Roadmap (CNR).
During the year we have continued, as requested by the
government, to support them in the administration of the Low
Carbon Heating Incentive Scheme (LCHI) as well as a similar
scheme for the purchase of electric vehicles (EV).
The EV scheme has proved popular – with a record number of
EV vehicles registered in Jersey through the year. The scheme,
now fully utilised, was closed at the end of 2024.
3,142
ELECTRIC VEHICLES
REGISTERED IN
JERSEY 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
29
JERSEY ELECTRICITY Annual Report and Accounts 2024
Understanding our stakeholders (continued)
Shareholders
Meeting the needs of our shareholders
ensures that the business remains
sustainable, helping Jersey Electricity
meet all our stakeholder needs and
deliver long term societal value.
Our governance framework and approach to risk management
is set out on pages 56 to 67. Our vertically integrated business
model means that financial resilience is strong and enables us to
make efficiencies throughout the value chain, resulting in strong
operational and financial performance, as well as long term
stability for the Island.
Delivering a stable, reliable return for our shareholders is a key
part of our strategy and financial resilience. This year we delivered
a 5.3% increase in dividend and our Return on Assets for the year
was 7.3%, which represented 6.3% on a 5-year rolling basis, which
is line with target.
5.3%
INCREASE IN DIVIDEND
7.3%
IN-YEAR RETURN
ON ENERGY ASSETS
6.3%
RETURN ON ENERGY
ASSETS 5-YR ROLLING
AVERAGE
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
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 2040 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.
30
JERSEY ELECTRICITY Annual Report and Accounts 2024
In 1987, the United Nations Brundtland
Commission defined sustainability
as “meeting the needs of the present
without compromising the ability
of future generations to meet their
own needs.” This concept has been
a part of JE’s business model for
many years. Sustainability involves
achieving net zero in a manner that
creates and distributes value among
all stakeholders.
Sustainability Framework
The UN’s 17 Sustainable Development Goals (SDGs) are
the global blueprint for a sustainable future. These are
not limited to the ecological environment or climate,
but rather encompass the mindset of sustainability to
everything we do. It is this definition of sustainability
that flows into JE’s primary objective to be safe, reliable,
affordable and sustainable. Simply put, it defines how we
approach the whole ecosystem we operate within.
At JE we recognise that positive outcomes can only
occur when sustainability is embedded across the
organisation. Our Sustainability Framework, mapped
to the UN SDGs, sets out our commitments to achieving
long-term sustainability within our business strategy.
We continue to expand, assess and monitor the range of
sustainability measurements, and we record that data
to bring efficiencies to our operational processes.
Sustainability at JE:
more than achieving net zero
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
• We will seek to deliver an
affordable, secure and sustainable
energy supply for all Islanders.
• We will provide solutions and
services to enable customer and
community transitions to net zero.
• We will contribute to the
regeneration of the Island's
ecosystem.
• We will reduce emissions
from our operations.
• We will reduce waste and
drive sustainability across our
business wherever we can.
• We will build a more sustainable
supply chain.
• We will create champions
of sustainability through
our culture and values.
• We will celebrate diversity,
equity and inclusion 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.
31
JERSEY ELECTRICITY Annual Report and Accounts 2024
£4m
96% of customers within
1.5 miles
of an EV charger
95%
Jersey’s electricity
requirements via low
carbon sources
34
Employee
Net Promoter Score
£18m
investment in resilient
infrastructure
99%
of our people carbon
literacy trained
Our 2024
Progress
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
invested in
on-Island Solar
UK Tariff Prices are
50%
higher than Jersey
32
JERSEY ELECTRICITY Annual Report and Accounts 2024
On average, our Energy business
imports 95% of its electricity needs
from France. This energy is a mix of low
carbon nuclear and hydro power, and
this strategy benefits Jersey by reducing
carbon emissions. In fact, we have
reduced emissions from the supply of
electricity by over 90% since 1990.
Leveraging data
We are investing in next generation smart meters, supported by
new metering software that will bring about an ever-greater
understanding of our network. This will allow more informed
decision making, particularly around energy delivery and
network development to maximise the potential of the resources
we have and minimise waste.
Long term green, clean energy
Our renewables strategy is aimed at utilising local resources to
deliver low carbon power that will both supplement and, in part,
replace the importation of power from France.
During the year we launched our Solar 5000 campaign. This
represents our aim to power 5,000 homes with solar power by
2030. We are hoping to achieve this based on a mix of utility
scale ground mounted solar arrays supported by rooftop solar.
We are finalising construction on our first utility scale ground
mounted solar array, in St Clement, which is scheduled to be
commissioned in January 2025 (see page 40 for more details).
We also recognise that sustainability means more than reducing
carbon emissions. Protecting wildlife habits and increasing the
biodiversity of our Island is paramount. Indeed, as we begin
the journey on our ground mounted solar installations, we
look for ways to create symbiotic synergistic opportunities for
both power production and the natural environment. A key
approach in this effort is agrivoltaics, which combines solar
energy generation with agricultural practices. By installing solar
panels above crop fields or grazing areas, agrivoltaics allows for
dual land use, promoting renewable energy whilst enhancing
local biodiversity. This innovative approach can provide shaded
areas for wildlife, reduce soil erosion, and improve water
retention in the soil, all while contributing to sustainable farming
practices. We are excited to explore agrivoltaics as a means to
not only generate clean energy for the Island but also support
the preservation and growth of our Island’s ecosystems.
In July, King Charles visited Jersey and our display at the
“Royal Exhibition” demonstrated a mock-up of an agrivoltaics
installation. Significant research is being undertaken to look
Our Island
We also recognise
that sustainability
means more than
reducing carbon
emissions. Protecting
wildlife habits and
increasing the
biodiversity of our
Island is paramount.
Sustainability at JE (continued)
at how ground mounted solar can be used in conjunction with
both arable and livestock agriculture, in some cases improving
crop yields. Additionally, such sites can reduce soil erosion and
provide rain harvesting and reduced water usage. We already
plan to combine livestock farming with the ground based solar
sites we have under construction to reduce the requirement of
machinery to maintain the land.
REDUCTION IN
EMISSIONS SINCE 1990
90%
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
33
JERSEY ELECTRICITY Annual Report and Accounts 2024
As we set out our goal to achieve net
zero for our emissions by 2040*, we
continue to build out our scope, both
up and down our supply chains, and
measurements of our carbon footprint.
Aligning ourselves to the principles of the
task force on climate related financial
disclosures (TCFD) we are implementing
new software solutions to improve both
data capture and monitoring.
The impact our business has in terms
of carbon emissions and the wider
ecological environment has become
an integrated part of our organisational
culture.
Our governance structure for sustainability is set out on page 70.
Members of the Sustainability Committee come together across
the organisation and drive a focus on reducing our carbon
footprint and at the same time, consider wider ecological
impacts in all our decision making.
Climate Related Disclosures
Our Climate related Disclosures can be found on pages 68 to 77.
Our Footprint
Sustainability at JE (continued)
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
*For Jersey Electricity Operations - Scope 1 and 2 emissions
Sustainability around our people
recognises the importance of a healthy
workplace culture where employees
are treated with dignity and respect. It
is important that our people are kept
informed on issues around sustainability.
In August 2024, we held an all-employee
event “Power Up” and sustainability
formed a significant part of this event.
Employees have also undertaken company-wide carbon
literacy training and our ‘Living Leader’ program (provided
to all employees since 2018) provides the foundation of how
we encourage all our people to behave with openness,
compassion and integrity.
However, this is about more than our employees understanding
net zero. Jersey Electricity listens to its employees by means
of biannual employee engagement surveys. All results,
suggestions and findings are shared, with any key themes
and trends forming part of our continuous improvement
programmes, both group wide, as well as on an individual
team basis.
The overall engagement score forms a part of the corporate
scorecard. In 2024 we moved to measure employee net
promoter score (ePNS) rather than just employee satisfaction.
The ePNS score can effectively indicate engagement,
productivity and culture - key from a sustainability perspective.
This year we achieved an ePNS score of 34 which is in the
upper quartile for utility performance and in line with last
year’s performance.
Our People
34
JERSEY ELECTRICITY Annual Report and Accounts 2024
Sustainability at JE (continued)
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
35
JERSEY ELECTRICITY Annual Report and Accounts 2024
Sustainability at JE (continued)
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
36
JERSEY ELECTRICITY Annual Report and Accounts 2024
Business Unit Review
Energy
The Energy Business has had another
year of continued good performance.
The start of the year tested our network
resilience and incident response, with
the arrival of Storm Ciarán on 1 November
2023. This was the worst storm Jersey
has experienced in decades and brought
the impacts of climate change directly
to our Island.
Our fault response remained good, with an overall fault rate
of 1%. At its peak, 2,000 customers supplies were affected.
Our operational teams, supported by partners from the UK,
restored supplies quickly and over 95% of those customers
affected, were back on supply within four days.
The impact of Storm Ciarán was severe and devastating,
but the responses from our operational partners in the UK,
our customers, businesses and the community, was nothing
short of remarkable.
KPIs
2024
2023
No. customers
53,726
53,343
Customer Minutes Lost
(CMLs)
9.5
(excl Storm Ciarán)
4.0
Customer Interruptions (CIs)
19.3
(excl Storm Ciarán)
4.4
% Energy imported
94.5
94.5
Energy generated
from on-Island Solar
1m
units
0.93m
units
Network investment (£m)
18
11
Blended gCO2e/kWh
24.85
25.3
Lost time accidents
1
3
Energy Demand and Mix
Milder winters, coupled with growth in demand being offset
by more efficient customer usage has meant that unit sales
have remained stable, at 609 million units, compared to 608
million in 2023. Our peak demand reached 163 MW, again very
similar to the 2023 peak, of 159 MW.
We imported 94.5% (2023:
94.5%) of our requirements
from France and generated
0.2% (2023: 0.4%) of our
electricity on-Island from our
solar PV arrays. We purchased
the remaining 5.3% (2023: 5.1%)
of our electricity from local
generation and the Energy
from Waste (EfW) plant.
Safe
Reliable
Affordable
Low carbon power
Energy from Waste/on-Island diesel plant
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
37
JERSEY ELECTRICITY Annual Report and Accounts 2024
“Storm Ciarán tested our
network resilience and
incident response to the
maximum. Our operational
response was exceptional,
and the mobilisation of our
UK partners was vital in
helping us restore supply.”
Mark Preece,
Chief Operating Officer
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
38
JERSEY ELECTRICITY Annual Report and Accounts 2024
Business unit review Energy (continued)
Safe
Reliable
Sustainable
The Big Upgrade
In 2024, we embarked on one of our
largest investment programmes for
some time. ‘The Big Upgrade’ will see
JE investing £120m in the electricity
network over the next five years.
The investment programme is aimed at ensuring JE delivers
both subsea cable replacements, asset replacement and
increases in our network and generation capabilities that
support Jersey in its transition to net zero.
As we embark on our Big Upgrade programme, we have
accelerated the replacement of one of our subsea cables. The
cable has demonstrated signs of deterioration with instances
of fibre losses in this calendar year. The rate of deterioration is
difficult to predict and hence the decision has been made to
accelerate the cable’s replacement. On this basis the Directors
have taken the decision to fully impair the asset as at 30
September 2024 by £1.5m. Our supply of security standard
includes contingency plans in case of asset failures and our
plans remain robust (see page 63) with import capacity and
on-Island generation sufficient to meet the Island’s needs
should such a failure occur. The acceleration of this investment
is targeted at mitigating any medium to longer term exposure,
as well as ensuring we secure long term capacity and overall
efficient delivery.
Leveraging Data
Jersey already has a highly resilient, low-carbon grid, with spare
capacity at all voltages. Although demand is currently falling
as energy efficiency gains outstrip demand growth, we forecast
a 25% increase in peak demand to meet the Island’s net zero
2050 target.
New technologies and a combination of Smart Meter data,
tariff data, asset rating information and asset topography data
are providing valuable insights into the loading of our network,
enabling us to optimise investment programmes to ensure our
programmes deliver at the most efficient whole life cost. This
also includes enabling our customers to move from fossil fuels
to electrification as easily as possible, and, following a review
of our loadings against UK network cable loading best practice
we have introduced cyclic design ratings that allow circuits to
carry between 30% and 50% more power, reducing the need for
excessive reinforcements.
Our Big Upgrade programme is aimed at ensuring our service
remains safe, reliable, affordable and sustainable over the
long term.
£120m
INVESTMENT OVER
NEXT FIVE YEARS
“At the end of the year we have
initiated ‘The Big Upgrade’,
a programme which over the
next few years, will see a step
change in the scale of investment
by JE. It will leave a positive legacy
for our communities at an affordable
cost for customers and a fair return
to shareholders.”
Mark Preece,
Chief Operating Officer
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
39
JERSEY ELECTRICITY Annual Report and Accounts 2024
Business unit review Energy (continued)
Supply Security
Jersey has an enviable record on
supply security. 2024 has delivered a
customer minutes lost of 9.5 (2023: 4.0)
and customer interruptions of 19.3 (2023:
4.4) Although this represents an increase
on 2023, it is still significantly lower
than other jurisdictions and there is
no evidence to suggest that this relates
to any underlying network issues.
Last year we advised that, prompted by the energy crisis, driven
by Russia’s war on Ukraine, the demands of the Carbon Neutral
Roadmap and the 2021 French fishing dispute, a review of our
Security of Supply Standard was completed.
Reliable
Affordable
The review resulted in the Board’s approval of the La Collette
Resilience Programme and includes the installation of new Gas
Turbines at the site to provide an additional 50MW of capacity.
The programme commenced this year with work starting
to prepare the site for construction. The programme is expected
to take up to four years at an estimated cost of £30m with
the enhanced Security of Supply Standard adopted by
summer 2028.
The enhanced security of supply standard delivers:
• A 1-in-20-year winter peak demand
• Meet 99% of all demand in a 1-in-3 winter if we lose:
– All supplies from France
– Simultaneous loss of largest on-Island generator
• Meet 100% of demand in a 1-in-10 winter if we lose:
– Any submarine cable
– Simultaneous loss of two largest on-Island generators
– No coincidence of the above
9.5
CUSTOMER
MINUTES LOST
+5.8 FROM 2023
19.3
CUSTOMER
INTERRUPTIONS
+15 FROM 2023
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
40
JERSEY ELECTRICITY Annual Report and Accounts 2024
Business unit review Energy (continued)
Long Term Green and Clean Energy
With around 95% of our current electricity
needs being delivered through low
carbon sources, our renewables strategy
looks to complement this by investing
in renewable generation.
Offshore Wind
During the last year we have continued to explore JE’s role
in Offshore Wind and how, this might be most helpful to the
Government of Jersey. We have regularly engaged with
the Government’s Future Energy Group (a subcommittee of
the Council of Ministers) and our partners to explore how the
proposals can be the most cost effective.
On-Island Solar
During the year we launched our Solar 5000 campaign. This
represents our aim to power the equivalent of 5,000 homes with
solar power by 2030. We will achieve this ambition based on a
mix of utility scale ground mounted solar arrays supported by
rooftop solar.
We are finalising construction on our first utility scale ground
mounted solar array, in St Clement. The array will deliver up
to 4MW of energy and is scheduled to be commissioned in
January 2025. With planning permission being granted for an
array at Sorel Point, we are hoping to start construction and
commission during 2025.
Sustainable
Affordable
Safe
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Business unit review Energy (continued)
Approach to risk
The HSE team employs a comprehensive risk-based
methodology across all operations and activities.
The presence of well-defined policies and procedure is of
paramount importance in effectively mitigating risks. However,
policies alone, while crucial, cannot fully suffice.
A synergy between ongoing risk assessment and the
identification of leading indicators is vital in achieving a safe
working environment. This would be unattainable without
the active involvement and engagement of the workforce,
which is constantly reinforced through training, HSE Committee
meetings and site visits.
This approach also hinges upon a robust reporting culture.
Employees are empowered to question established work
practices and highlight concerns as they arise.
Our no-blame culture ensures there is no fear in reporting
accidents or near misses, affording the opportunity to meet
these challenges.
In a complex and high-risk environment, regrettably accidents
and incidents can occur. In 2024 we have had one Lost Time
Injury (LTI), which was not of a serious nature and resulted in
24 lost working days due to injury.
1
LOST TIME
INJURY
Safe
Health and Safety
Nothing is more important to us than
the health, safety and wellbeing of
our customers, teams and contractors.
A positive safety culture
Over recent years we have invested in our resources, systems
and process. Our aim being to shift from a compliance culture
to a proactive, continuous improvement culture.
Expanding our Health, Safety and Environment (HSE) team, as
well as investment in our EcoOnline platform, have facilitated a
more comprehensive, efficient and proactive approach to how
we manage incidents, audits and inspections. Our EcoOnline
systems help us analyse trends, allowing us to identify both
specific and general training needs.
Sharing best practice
Our commitment to HSE is further demonstrated by employees
across the business volunteering to serve on external
committees including the Health, Safety and Sustainability
subcommittees of the Jersey Construction Council, the Jersey
Safety Council and the Jersey Chamber of Commerce Building,
Housing and Environment Committee.
In June 2024, Jersey Electricity hosted the UK’s Energy Network
Association annual conference. This allowed an opportunity
to share best practice and discuss future challenges with other
Energy Network businesses across the UK.
Looking ahead to 2025 we will be continuing to roll out
a Behavioural Safety Training programme, alongside
a programme of safety culture.
41
JERSEY ELECTRICITY Annual Report and Accounts 2024
JE apprentice Cody O’Gorman
addressing the ENA Conference.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
42
JERSEY ELECTRICITY Annual Report and Accounts 2024
Business Unit Review
Home and Business:
Beyond the Meter
Services
Safe
Reliable
Affordable
Sustainable
A great Customer Experience -
delivered by great people
Our strategy focuses on four areas:
• Reducing upfront costs to customer – providing
innovative financing options enabling customers
to avoid large upfront costs.
• Providing a single point service – providing a single
point efficient service that works in partnership with the
customer through and beyond the switching process.
• Avoiding large network reinforcement costs - by
enabling individual customers and Islanders to share
in the benefits of an all-electric heated Jersey we can
avoid significant costs that would otherwise be required
to enable the network to carry additional load.
• Providing long term shareholder return – delivering
a fair return to shareholders over the long term.
“Our goal is to help over
85% of fossil fuel customers
switch to clean energy by
2040, with efficient switching
and running costs.”
Peter Cadiou
Business Development Director
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
43
JERSEY ELECTRICITY Annual Report and Accounts 2024
Support for Government and Stakeholders
During 2024 we have continued to support the government in
facilitating and providing administrative services to three low
carbon schemes:
• The Low Carbon Heating Incentive (LCHI) scheme launched
in May 2023, which sets a target of 1000 grants to be delivered
by 2025.
• Electric Vehicle Purchase Incentive (EVPI) Scheme launched
in September 2023, which aims to support the purchase of
1200 EVs.
• Electric Vehicle Charger Incentive (EVCI) scheme launched
in September 2023 which aims to support 1,000 home charger
installations.
Jersey Electricity collaborates closely with key stakeholders
to support Jersey’s ambition of achieving carbon neutrality by
2050, as outlined in the Carbon Neutral Roadmap, by actively
engaging with a variety of stakeholders to advance this goal.
Our participation includes involvement in the Government’s
Energy Suppliers Group forum, the Chamber of Commerce
Building, Housing, and Environment Committee, and support
for the Jersey Construction Council.
Helping Customers Save Energy
Supporting our customers to understand energy usage and
save energy is a priority for JE. Our heating solutions are
focused on enabling customers to transition to low carbon
energy whilst encouraging the use of technologies that also
deliver lower running costs, such as Air Source Heat Pumps.
This ensures customers can balance upfront costs with long
term energy efficiency.
As part of our ongoing commitment to customer service
and energy efficiency, we are pleased at the success of
our Thermal Camera Loan Scheme. The scheme enables
customers to use and evaluate their home’s energy efficiency
and identify areas for thermal improvements, ultimately saving
money and energy through increased awareness.
Our flagship energy-saving mobile application, My JE,
launched in 2021, has been continuously improved to provide our
customers with unparalleled energy insights. The application
not only provides insight to support the business in making
both operational and investment decisions, but also empowers
customers to make positive changes that can really impact their
energy usage. My JE now boasts over 27,166 downloads.
During 2024, we have been developing a My JE for Business
app. The app is designed to provide similar insights for business
usage as the My JE app does for home usage. My JE app for
business is due to be launched in 2025.
2024
2023
No. Customers
53,276
53,343
Number of Fuel Switches (JE)
239
235
No Customer on Discounted
Heating Tariffs
23,657
22,865
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Business unit review Home and business: Beyond the meter services (continued)
The Rooftop Revolution
In 2024, as part of our Solar 5000 campaign, we
launched the Rooftop Revolution. This plays a key part
in both our renewables strategy as well as our home
and business heating solutions.
The proposition focuses on delivering homes and
business with energy direct from their rooftop and, at
the same time, facilitating a switch from fossil fuel to
electric heating.
In addition, JE has been working on a Power Purchase
Agreement framework, designed to create a level of
security for those customers who export to the grid.
44
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Business unit review Home and business: Beyond the meter services (continued)
Evolve
In addition to providing administration services to the GoJ
for the Electric Vehicle Grant Scheme, we continue to develop
innovative solutions to support customers in the transition to
electric transport.
Our all-inclusive home EV charging subscription service
EasyCharge, launched in May 2022, continues to be popular
with customers, now with 308 installations (up 158 from 2023).
The service helps customers access convenient charging
and enables us to move load from peak times to overnight
off-peak periods when we have spare capacity and energy
costs are lower.
Public Charging
Last year we upgraded our public charging stations. These
are run in partnership with Virta and the new platform is
compatible with tens of thousands of public charging points
off-Island, including the UK and Europe, enabling Islanders
to charge abroad through roaming agreements, by using the
app or charging tag.
We are currently in the process of securing sites for two
further dual, 150kW, ultra-rapid chargers in the east and west
of the Island to add to our existing one at our Powerhouse
headquarters to enabling faster charging for newer cars with
larger batteries
45
JERSEY ELECTRICITY Annual Report and Accounts 2024
Award winning
We are really proud to have
received national recognition of our
innovative home electric vehicle
charging solution, EasyCharge,
at the Electric Vehicle Innovation
& Excellence Awards (EVies).
EasyCharge triumphed over
several industry giants including
Octopus Energy, OVO Energy,
and Hive (British Gas) to win
the ‘Best Consumer Proposition’
award for the utility and energy
sectors. Developed in-house with
innovative technology, EasyCharge
aims to support the transition to
electric transport for our customers.
TOTAL CUSTOMERS
3,142
NEW ELECTRIC
VEHICLES
+895 RECORDED IN 2023
CHARGING POINTS
PER 100,00 POPULATION
110
+5 FROM 2023
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
46
JERSEY ELECTRICITY Annual Report and Accounts 2024
Powerhouse.je
Our Powerhouse retail store continues to make strides in its
market position and operational efficiency despite a continued
challenging recruitment market. During the year, the business
acquired an additional 4,800 sqft of additional retail space and
has started a programme of expansion, which aims to diversify
our product mix and create a relaxing, friendly and helpful
shopping experience for our customers.
Leveraging the services developed in 2023, we are refining our
Samsung repair service and are planning to expand this service
to incorporate LG TV repairs.
As we look forward to 2025, we will be implementing a new
technology platform that will underpin our retail operations,
and further enhance our customers’ shopping experience. Profit
for the year was £0.6m compared to £0.9m in 2023. This was
predominantly due to a fall in revenues following a slower than
anticipated year and high inflation affecting storage costs.
Business Unit Review
Other Businesses
Our other commercial businesses
complement our Energy business,
and their activities are aligned with
our Group purpose, vision and strategy.
Safe
Reliable
Affordable
Sustainable
A great Customer Experience -
delivered by great people
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
47
JERSEY ELECTRICITY Annual Report and Accounts 2024
JEBS
JEBS, our Building Services division, undertakes fuel switching
customers from gas and oil to electric heating and cooling
systems. During 2023 fuel switching was temporarily impacted
by the launch of the Government’s Low Carbon Heating
Incentive (LCHI) scheme as customers delayed changing their
heating systems until the scheme was fully implemented and
grants became available. During 2024 the fuel switching run
rate began to return to normal levels and revenues increased
by £0.5m and profit by £0.1m.
In line with the Group, JEBS as a business unit is pushing ahead
with the reduction of its own carbon footprint by continuing
to replace its fleet of ageing diesel-powered vehicles with
fully electric models. At the end of 2024 JEBS has achieved the
transition to a 100% all-electric fleet.
Jersey Energy
Jersey Energy, which includes Channel Design Consultants in
Guernsey, continues to set industry standards as the premier
MEP (Mechanical, Electrical, and Plumbing) consultancy services
provider in the Channel Islands. The year 2024 has been marked
by several significant projects, underscoring our commitment to
excellence and innovation:
• The Limes: Completed the construction of 127 new apartments
and the refurbishment of 15 apartments, inclusive of
underground parking and communal gardens for Andium
Homes.
• Telecoms Data Center: Ongoing major refurbishment utilising
advanced 3D modelling techniques for enhanced design
accuracy and coordination.
• Jersey Water Headquarters: Design and ongoing site work at
the new headquarters located at Rue des Pres Trading Estate.
• Sexual Assault Referral Centre: Finalised building services
design with construction scheduled to commence shortly.
• Ports of Jersey: Engaged in multiple projects, including
significant plant upgrades at the airport and improvements
to the electrical infrastructure at the harbours.
Our strategic vision includes expanding our business and
service offerings across the Channel Islands, supporting the
Islands’ transition towards a sustainable, zero-carbon future.
Integral to this vision is our commitment to staff training, ensuring
our team acquires new skills necessary to provide optimal
solutions for our clients.
Our investment in staff has yielded positive results. One engineer
earned a distinction for their HNC, while others are taking City
& Guild courses in power generation and electrotechnical
engineering. We also provide training in historic building
engineering, management, leadership, CPD and IOD courses.
Jersey Energy has invested in state-of-the-art surveying
equipment, including a CAT underground scanner, advanced
energy logging tools, and a high-tech thermal imaging drone.
These investments enhance our service capabilities, positioning
us at the forefront of industry innovation.
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 comprising several tenants, as well as
29 private houses and flats, rented on the open market.
The £0.9m profit in our property division, is £0.2m lower than in
2023. In March 2023 one of the commercial spaces at Queen’s
Road was vacated. The new tenant arrived in April 2024,
and accounts for the small year-on-year reduction in profit.
This excludes the revaluation of our property portfolio. The
revaluation impact decreased by £0.3m, in 2024.
Jersey Energy is proud to be
the first business in Jersey to
be accredited to undertake
commercial Energy
Performance Certificates
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
48
JERSEY ELECTRICITY Annual Report and Accounts 2024
Throughout 2024, we dedicated ourselves to extracting
additional value from our already industry-leading platforms
by integrating and optimising our tools.
Empowering Teams, Optimising Operations
In the past year, we have made good progress in human
capital enablement by implementing a new core people
platform that has advanced how our people work.
We launched a modern Human Resources platform to
streamline our HR functions and team management. This
system automates processes, leading to organisation-wide
enhancements in efficiency and effective HR processes.
To enhance employee recognition, we introduced a platform
dedicated to staff appreciation. This system bolsters
workplace culture and increases productivity by offering
tools for recognition and rewards. These features align
with our commitment to attracting and retaining talent and
improving company morale.
We enhanced operational efficiency and improved
financial controls by implementing solutions to align travel
and expense authorisation, automating processes, and
simplifying compliance. This allows us to manage expenses
more efficiently, supporting improved cost management.
My JE: Empowering Customers
Our flagship energy-saving mobile application, My JE,
launched in 2021, has been continuously improved to
provide our customers with improved energy insights. The
application not only provides insight to support the business
in making both operational and investment decisions, but
also empowers customers to make positive changes that can
really impact their energy usage.
Business Unit Review
Technology: Building
a smarter utility
At Jersey Electricity, we’re dedicated
to harnessing the power of technology
to drive a smarter, more sustainable
future for our customers. Through
our commitment to investing in the
right technologies, we aim to enhance
customer energy efficiency, enabling
us to deliver a smarter, more sustainable
future for our customers.
By investing in the most effective
solutions tailored to our needs, we’re
building a more resilient, efficient,
and effective business that serves
our customers better.
Safe
Reliable
Affordable
Sustainable
A great Customer Experience -
delivered by great people
27.2k
MYJE APP
DOWNLOADS
99.89%
UPTIME EFFICIENCY
RATE
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
49
JERSEY ELECTRICITY Annual Report and Accounts 2024
My JE now boasts over 27,166 downloads, with an average of
c13,000 monthly active users during 2024.
We are excited to have introduced a new feature within My JE:
the Energy Advisor in 2024. This tool provides customers with
custom advice based on their individual energy utilisation,
offering tailored recommendations to enhance efficiency and
reduce costs. In 2024, we also developed the My JE for Business
solution, which we are looking to launch in 2025.
Energising Our Digital Infrastructure
This year, we focused on building a robust corporate
infrastructure foundation designed to support our long-term
ambitions and operational resilience. Our infrastructure
refresh programme involved implementing a core network
infrastructure that enables seamless cloud adoption across our
organisation. Key elements of this project included upgrading
our corporate fibre network, enhancing network infrastructure,
and investing in advanced storage and processing capabilities.
Each component has been carefully designed to ensure
resilience, stability, and the flexibility needed to adapt to future
demands. These advancements strengthen our operational
backbone, positioning us to scale and meet the evolving needs
of our customers and business alike.
Our corporate technology infrastructure maintained an
impressive uptime rate of over 99.89%.
Safeguarding Our Systems,
Protecting Our Future
In today’s rapidly changing cybersecurity landscape, JE
prioritises a proactive approach to threat evaluation and
mitigation. This involves continuously assessing emerging
threats and adapting our defences accordingly, while also
fostering a culture of innovation and agility in the development
and deployment of fit-for-purpose cybersecurity solutions. By
embracing this dynamic approach, we ensure our digital assets
remain protected against the evolving threat landscape.
We invest in technology that supports our business goals. By
prioritising reliability, efficiency, and sustainability, we focus on
customer satisfaction, cost savings, and progress.
In the future we will be:
• Implementing a new security framework that will provide
future risk aligned threat detection and prevention for further
improved security posture.
• Evaluating opportunities for our next generation smart meter
network to bring future energy efficiency opportunities and
service options to customers
• We will be investing in our core enterprise software system
to improve efficiency, accuracy and decision-making
capabilities.
Jendev
Jendev offers comprehensive digital enterprise resource
planning solutions across JE’s business domains for
internal and external clients. Their services include
standardised and custom systems, specialising in
Microsoft NAV and Dynamics applications. They handle
projects involving various technologies, providing
business analysis, consulting, design, development,
training, and project management. Jendev integrates,
delivers and maintains on-premises and cloud-based
solutions while expanding its digital skills to incorporate
strategic technologies.
“My JE now boasts
over 27,166 downloads,
with an average of
c13,000 monthly active
users during 2024.”
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
50
JERSEY ELECTRICITY Annual Report and Accounts 2024
Financial Review
Group financial results
2024
2023
Revenue
£135.7m
£125.1m
Profit Before Tax
£15.1m
£14.9m
Earnings Per Share
37.92p
36.81p
Dividend Per Share
19.80p
18.80p
Proposed Final Dividend Per Share
12.00p
11.40p
Net Cash*
£19.2m
£17.4m
In Year Return on Assets
7.3%
7.2%
Return on Assets - Five-year rolling
6.3%
6.2%
*Net Cash is calculated as cash of £49.2m less borrowings of £30.0m; (2023: £47.4m less £30.0m)
Our financial performance in 2023/24
remains strong, with a healthy balance sheet
supported by high-quality assets. Our power
procurement and hedging strategy has
shielded us from the wholesale energy
market volatility in recent years, where prices
have soared up to more than tenfold from
the historic prices. Despite the challenges
posed by the macro-economic climate,
which have pressurised the cost base,
our financial performance and
long-term resilience remains strong.
Financial Performance
Group revenue for the year to 30 September
2024 increased year-on-year by £10.7m (8.5%)
largely due to tariff price increases in the Energy
Business. Revenue across the wider group remained
materially in line with the previous financial year.
Group Profit before tax for the year to 30 September
2024 was £15.1m compared to £14.9m in 2023. The
property revaluation impact decreased by £0.3m
from a £1.2m reduction in 2023, to £0.9m. Profit before
tax excluding property revaluation and interest
income is at £15.3m compared to £15.7m in 2023,
predominately due to slightly reduced profits in the
Retail and Property Businesses.
Energy Business: Operating Profit at £13.0m,
is in line with the prior year. Revenue increased by
£11m, following a tariff price increase on 1 January
2024, however, this was offset by a £11m increase
in wholesale energy costs and operating costs.
Operating costs increased year-on-year due to
a combination of high inflation and continued
investment in our people, processes and technology
to support growth in our capital, maintenance and
IT programmes.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
51
JERSEY ELECTRICITY Annual Report and Accounts 2024
GROUP REVENUE
£135.7m
8.5% YEAR-ON-YEAR INCREASE
GROUP PROFIT BEFORE TAX
£15.1m
2023 £14.9M
ENERGY BUSINESS
OPERATING PROFIT
£13.0m
5.3%
DIVIDEND INCREASE
TAXATION
£3.4m
2023 £3.4M
NET CASH
£19.2m
2023 £17.4M
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
52
JERSEY ELECTRICITY Annual Report and Accounts 2024
Financial review (continued)
Financial Performance (continued)
Energy (continued): As we embark on our Big Upgrade
programme, we have accelerated the replacement
of one of our subsea cables. The cable has seen some
deterioration, and the cable has been impaired, resulting
in a £1.5m charge in the year. Our operating plans have
been reviewed should a failure occur and we expect no
material short term increases in operating costs should
this occur.
The Energy Business delivered a Return on Assets (ROA)
of 7.3% in year, compared to 7.2% in 2023. Our target is to
deliver between 6%-7% ROA on a rolling five year basis.
The 2024 rolling 5 year ROA is on target at 6.3%. (see other
information, Alternative Performance Measures).
Property: The £0.9m profit in our property division, is £0.2m
lower than in 2023. In March 2023 one of the commercial
spaces at Queen’s Road was vacated. The new tenant
arrived in April 2024, which accounts for the small year-
on-year reduction in profit.
Powerhouse.je: Profit in our retail business was £0.6m
compared to £0.9m in 2023. This was predominantly due to
a fall in revenues following a slower than anticipated year
and high inflation affecting storage costs.
JEBS: Profits increased by £0.1m across our building services
as the level of activity returned to expected levels following
the temporary reduction in the pace of fuel switching as the
government incentive scheme was being launched.
Other business units Jersey Energy, Jendev, Jersey Deep
Freeze and fibre optic lease rentals produced combined
profits of £0.4m being £0.1m below last year.
Net interest income was £0.8m in 2024 compared
to a net interest income of £0.3m in 2023.
Taxation: at £3.4m was in line with the prior year.
Group basic and diluted earnings per share, at 37.92p,
comparable to 36.81p in 2023, rose due to increased
profitability. Dividends paid in the year, net of tax, rose by
5.3%, from 18.80p in 2023 to 19.80p in 2024. The proposed final
dividend for this year is 12.00p, a 5.3% rise on the previous
year. Dividend cover, at 1.9 times, is broadly in line with 2023.
Net cash at £19.2m was £1.8m higher than in 2023. This
increase was due to £6.8m increased net cashflows from
operating activities (mainly driven by favourable working
capital movements) offset by increased cash in investment
activities of £5m.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
53
JERSEY ELECTRICITY Annual Report and Accounts 2024
Financial review (continued)
Impact from Wholesale Market Volatility
Our goal is to provide our customers with a market-based price
but with a degree of certainty in a volatile energy marketplace.
Pricing decisions are made by a Pricing Management Committee,
consisting of employees of Jersey Electricity, Guernsey Electricity
and an independent energy market adviser and follows
guidelines approved by the Jersey Electricity Plc Board.
Over the last three years we have seen unprecedented volatility
in energy markets. This resulted in many UK suppliers going out
of business and at its peak required government intervention
to avoid an 80% increase in energy prices. Even with the
government subsidy and price cap, prices still materially rose
for consumers. Although the government subsidy has ended
in the UK, a price cap is still in place and currently, the average
domestic customer in Jersey is paying 50% lower than customers
do in the UK for their electricity.
Our hedging policies have, to date, sheltered Jersey customers
from the most extreme period of material rises that otherwise
would have been experienced during this period. During 2024
the wholesale market has eased, and prices have started to
reduce. However, the market remains higher than the historical
norms. To enable the transition to these emerging market
conditions, tariff prices were increased by 12% on 1 January 2024.
A further increase of 7.5% is planned from 1 January 2025.
Although any such rises are difficult, they are much lower than
increases in other jurisdictions which we continue to benchmark
favourably in terms of absolute price. After the 7.5% increase our
prices remain 50% lower than the UK.
As we look forward over 85% of our energy is already hedged
at fixed prices for 2025. In addition, 2026 and 2027 are now
materially hedged.
Our focus remains to ensure that we transition our customers
through the energy crisis whilst we maintain affordability.
Treasury Matters and Hedging Policies
Operating within policies approved by the Board and overseen
by the Chief Financial Officer, 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 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, because of the hedging
programme, was 1.12 €/£. The spot rate at the 30 September
2024 was 1.2€/£, which resulted in a £3.5m adverse fair value
adjustment through Other Comprehensive Income (OCI).
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 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 several counterparties.
“As we look forward over 85% of our
energy is already hedged for 2025,
with 2026 and 2027 materially hedged.”
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
54
JERSEY ELECTRICITY Annual Report and Accounts 2024
Financial review (continued)
Defined Benefit Pension Scheme Arrangements
As of 30 September 2024, the scheme surplus, under IAS 19
“Employee Benefits”, increased to £22.4m, net of deferred tax,
compared with a surplus of £20.4m on 30 September 2023.
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. Details of assumptions, movements in scheme
assets and liabilities, including sensitivity analysis can be found
in Note 16 (page 125) to the financial statements.
The most recent triennial actuarial valuation, as of 31 December
2021 showed a surplus of £17.1m. Our next triannual valuation is
due on 31 December 2024.
Unlike most UK schemes, the Jersey Electricity Pension Scheme
is not funded to pay mandatory annual rises on retirement.
The final salary scheme was closed to new members in 2013,
with new employees, since that time, being offered defined
contribution pension arrangements.
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 several private
clients, and a fund, residing largely in the Channel Islands. During
the year the ordinary dividend paid increased from 18.80p net of
tax to 19.80p. The proposed final dividend for 2024, at 12.00p, is a
5.3% increase on last year. This is consistent with the underlying
dividend pattern in recent years and our stated dividend policy
to deliver sustained real growth in the medium-term.
The share price at 30 September 2024 was £4.30 against £4.50
at the 2023 year end. This gives an implied market capitalisation
of £132m at 30 September 2024 compared with a balance sheet
net assets position of around £245m. However, the illiquidity of
our shares, due mainly to having one large majority shareholder,
combined with an overall small number in circulation, constrains
the ability of the management team to influence the share price.
We use Edison (an investment research firm) to produce regular
research on our performance to aid the understanding of our
value proposition to a wider body of potential investors in the
quest to improve our longer-term liquidity.
“During the year the
ordinary dividend paid
increased by 5.3% from
18.80p net of tax to
19.80p. The proposed final
dividend for 2024, at 12.00p,
is a 5.3% increase on last
year. This is consistent
with the underlying
dividend pattern in recent
years and our stated
dividend policy to deliver
sustained real growth
in the medium-term.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
55
JERSEY ELECTRICITY Annual Report and Accounts 2024
Financial review (continued)
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. Each September
the Board approves a five-year strategic company business
plan. 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.
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 2029.
In making this statement the Directors have considered the
resilience of the Company considering 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.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
56
JERSEY ELECTRICITY Annual Report and Accounts 2024
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.
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.
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.
Three Lines Model
Jersey Electricity has adopted the ‘Three lines model’ to embed
risk monitoring and manage internal controls systematically
and organisationally.
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 the
effective risk management:
• Functions that own and manage risks.
• Functions that oversee risk management and the risk
management framework.
• Functions that provide independent assurance.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
57
JERSEY ELECTRICITY Annual Report and Accounts 2024
JE Board
Approves the Risk Management framework, Risk Appetite and Risk principles.
Three lines model
Audit and Risk Committee (ARC)
Governs and provides assurance that risks have been identified,
evaluated, addressed (mitigated/treated) and monitored.
ELT Sponsor
• Established and owns
Risk Management policy
and processes.
• Provides updates to the ELT,
ARC and Board.
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.
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
defence 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
on the financial
statements.
• Provides the
highest form
of impartial
assurance.
Accountability & reporting for evaluations
Delegation, direction & oversight
Collaboration & communication
External assurance reporting
KEY
The arrows illustrate the reporting lines,
direction and collaboration for each
core component of this framework.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
58
JERSEY ELECTRICITY Annual Report and Accounts 2024
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 (ELT) for their
review. Applying a Group-wide perspective, the ELT 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 their 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.
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.
Principal Risk Register
The principal risk register is a summary of the top risks, emerging risks and uncertainties facing the
Company. It is collated into a group view after a process of bottom up and top-down risk assessments,
with the risks assigned to a member of the Executive leadership team.
RISK LANDSCAPE
• 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.
MONITORING AND OVERSIGHT
• 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.
RISK MANAGEMENT FRAMEWORK
• 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.
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.
Group Risk Management (continued)
Risk Management Framework
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
59
JERSEY ELECTRICITY Annual Report and Accounts 2024
Risk Appetite
The Board has determined the risk appetite and risk tolerance
for the Group’s principal risks. A set of strategic statements have
been developed that reflects the strategic intent and levels of
risk that management deems acceptable, whilst risk tolerances
set the acceptable level of variation and required action around
risk ratings:
• Averse – Prepared to accept only the very lowest level of
risks, with the preference being for low-risk delivery options,
whilst recognising that these will have little or no potential for
reward/return.
• Cautious - Willing to accept some low risks, while maintaining
an overall preference for low risk delivery options that are
unlikely to have a significant impact despite the probability
of these having mostly restricted potential for reward/ return.
• Moderate - Tending towards exposure to only moderate
levels of risk in order to achieve acceptable, but possible
unambitious outcomes
• Open - Willing to consider all options and choose one
most likely to result in successful delivery while providing
an acceptable level of benefit. Seek to achieve a balance
between a high likelihood of successful delivery and a high
degree of benefit and value for money.
• Enterprise - Ambitious and willing to be innovative and to
choose options that suspend previous held assumptions and
accept greater uncertainty.
Our principal risks and uncertainties
The principal risk heat map provides an indicative view of the
current risk exposure (likelihood of occurrence and most likely
impact) of each of the principal risks relative to each other.
• 9 of the 11 principal risks have remained relatively stable in the
last 12 months. The following principle risks have reduced in
the year:
• Market volatility and tariff prices - has reduced in its risk
rating from critical to severe. This is due to the easing of the
wholesale market during the last twelve months. However,
the market remains volatile and above historic norms. This
risk is identified as on the ‘watch list’, resulting in an increase
in exposure and additional mitigating actions from the Board
and Management.
• Energy market share growth - has reduced in its risk rating
as the strategy and number of new product offerings has
increased through the year, along with the Low Carbon
Incentive scheme established by the government of Jersey.
This enables customers to fuel switch and purchase electric
vehicles more easily than in prior years.
Group Risk Management (continued)
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Principal Risks Heat Map
Likelihood
Almost
certain
Critical residual risk
None
High residual risk
4: Market volatility & tariff prices
3: Adverse political and
regulatory measures
Medium residual risk
9: Data loss or breach
10: Cyber threats
7: Health, Safety & Environment
5: Secure supply of energy
8: Climate change
6: People and culture
11: Pension liabilities
Low residual risk
2: Strategy and disruptive
technology
1: Energy market share growth
Risk exposure:
An indication of each principal risk
relative to the prior year reported.
Likely
Possible
Unlikely
Rare
Insignificant
Minor
Moderate
Major
Severe
<
<>
<
Decreased
Stable
Increased
Impact
<
<>
<>
<>
<>
<>
<>
<>
<>
<>
9
6
4
3
5
11
1
7
2
8
10
<
60
JERSEY ELECTRICITY Annual Report and Accounts 2024
Group Risk Management (continued)
Our principal risks and uncertainties
The following tables set out the Group’s principal risks, and provides a description of the risk, risk owner, risk trend, risk appetite
and mitigating actions. The principal risks are considered by the Board to be the most significant risks that could materially
affect the Group’s financial condition, ongoing performance and future strategy.
The risks listed do not comprise all risks faced by the Group and are not set out in any order of priority. Additional risks not
presently known to management, or currently deemed to be less material, may also have an adverse effect on the business.
<
Increasing
<
Decreasing
<> Stable
Risk Profiles Change Key
Vision Key
Lifestyle
We aim to enhance
Islanders’ lifestyles and
power the economy
by providing innovative,
low-carbon energy
services and solutions.
Environment
We support the
Government of Jersey’s
Carbon Neutral Roadmap
by growing electricity’s
share of the energy market
and reducing carbon
emissions, helping to
conserve resources and
protect the environment.
Customers
We put customers at the
heart of our business,
giving them choice,
control and value for
money in a transparent
and trusted way.
Our People
We aim to be an employer
of choice in Jersey,
where employees are
engaged, supported
and developed.
Partnerships
We aim to be the
partner of choice for the
Government of Jersey
and the Island’s parishes,
supporting all their
energy needs.
Investors
We provide a fair return
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.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
61
JERSEY ELECTRICITY Annual Report and Accounts 2024
We categorise our risks into four different areas to provide the appropriate level of governance to effectively manage these risks:
• Strategic Risks
• Financial Risks
• Operational Risks
• Technological Risks
Risk Category: Strategic Risks
Energy market share growth
Strategy and disruptive technology
Climate change and decarbonisation targets
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. A failure of two or more of our
subsea cables could result in short-term on-Island
generation which is more carbon intensive.
Risk Owner:
Business Development Director
Movement: Decreasing
Risk Appetite: Moderate
Our Vision:
Risk Owner:
Chief Operating Officer
Movement: Stable
Risk Appetite: Moderate
Our Vision:
Risk Owner:
Chief Financial Officer
Movement: Stable
Risk Appetite: Cautious
Our Vision:
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.
• Numerous workstreams in place to develop
products and solutions that enable
customers to fuel switch at an affordable
cost.
• A dedicated team working on low carbon
/ renewable initiatives - including EV, solar
power and other renewable options.
Key mitigating actions
• Opportunities and challenges related
to growth are a major area of focus
throughout the business, with advances
in technology reviewed and discussed.
• Refreshed Vision includes key strategic
workstreams which address innovation
and growth opportunities.
• Macro-economic factors that could
potentially impact the strategy are
tracked and regularly reviewed by ELT.
• Growth opportunities are reviewed in line
with our risk appetite, company values,
business model and culture.
Key mitigating actions
• 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.
• Integrating the energy transition and 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 pages
68 to 77.
• Management of our subsea cable strategy and
contingency planning.
<>
<>
<
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
62
JERSEY ELECTRICITY Annual Report and Accounts 2024
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. European energy price levels
have fallen from the unprecedented levels
seen in 2022/23 but are still above historic
levels.
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:
Chief Financial Officer
Principal Risk Trend: Stable
Risk Appetite: Cautious
Our Vision:
Risk Owner:
Chief Financial Officer
Principal Risk Trend: Decreasing
Risk Appetite: Moderate
Our Vision:
Risk Owner:
Chief Financial Officer
Principal Risk Trend: Stable
Risk Appetite: Moderate
Our Vision:
Key mitigating actions
• Strategic objectives in place to ensure 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).
Key mitigating actions
• Power Purchase contract with EDF in
place to 31 December 2027. Contract
negotiations post 2027 are progressing
well - new contract signing targeted for
summer 2025.
• 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.
• Management of subsea cable strategy
and contingency planning to minimise
cost impact.
Key mitigating actions
• 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
<>
<>
<
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
63
JERSEY ELECTRICITY Annual Report and Accounts 2024
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:
Chief Operating Officer
Movement: Stable
Risk Appetite: Cautious
Our Vision:
Risk Owner:
Chief Operating Officer
Movement: Stable
Risk Appetite: Averse
Our Vision:
Risk Owner:
People and Culture Director
Movement: Stable
Risk Appetite: Moderate
Our Vision:
Key mitigating actions
• Robust processes and procedures in
place to prevent unplanned outages and
interruptions to services.
• Three subsea cables to France provide
resiliency with regards supply importation
cables.
• Plans currently in places to replace our
oldest subsea cable, N2.
• Strong relationship with our suppliers and
engage in ongoing dialogue to understand
any developments that might impact
security of supply.
• On-Island generation capability to limit
over- reliance on any single fuel source or
technology.
• Repair and maintenance programme in
place to optimise the life of all assets.
• Comprehensive business continuity plans
which are periodically tested under various
scenario exercises.
• The completion of our smart metering
rollout has enhanced metering data,
enabling improved analytic insights to
better manage load.
Key mitigating actions
• 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.
Key mitigating actions
• Long-range workforce planning to better forecast
leavers and skill shortage risk.
• Annual succession planning for leadership
and critical roles, including replacement chart,
indicating risk areas.
• Diversity 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 policies and other
HR policies communicate expected behaviours
of all our people.
• Increased emphasis on mental health, wellness
programs and improving ways of working.
<>
<>
<>
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
64
JERSEY ELECTRICITY Annual Report and Accounts 2024
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: Company Secretary
Movement: Stable
Risk Appetite: Averse
Our Vision:
Risk Owner: Director of Technology
Movement: Stable
Risk Appetite: Averse
Our Vision:
Key mitigating actions
• Appointment of a data protection officer (DPO).
• Internal privacy governance structure established.
• 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.
Key mitigating actions
• Use of antivirus and malware software, firewalls, email scanning and
internet monitoring to identify and prevent cyber threats.
• Information Security systems that identifies, mitigates and removes
malicious domains and Internet Protocols.
• IT policies in place to manage administrator, privileged and service
accounts.
• Regular monitoring of unusual or suspect 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.
<>
<>
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
65
JERSEY ELECTRICITY Annual Report and Accounts 2024
As with all businesses, we face several 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 Risks
Ref
Emerging risk
Risk owner
Risk Description
Action plans
ER1
Competition
in energy market
Business
Development
Director
Government legislation or the
removal of barriers to market
entry, results in new entrants
to the Jersey energy market,
resulting in loss of market share
and depleting profits.
•
•
•
A Product Development team has been
created within the Group to develop
new ideas for services and propositions,
including Heating as a Service (HaaS),
Lighting as a Service (LaaS), financing,
enabling growth.
Strategy sessions with the Board to
understand movement in the markets and
new competition.
PMO team to enable and support
successful development and launch of new
products and service offerings.
ER2
Natural
resource crisis
Chief
Operating
Officer
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
Europe (caused by war or other
event). Adverse movements
in market conditions, coupled
with natural resource crisis
which may result in more
reliance on nuclear, may
negatively impact tariffs.
•
•
•
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.
ER3
Extreme
weather event
Chief
Operating
Officer
Probability of extreme
weather (such as storms and
heatwaves) impacting on our
business model and capacity
for growth in demand.
•
•
•
•
•
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.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
66
JERSEY ELECTRICITY Annual Report and Accounts 2024
Group Risk Management (continued)
Emerging Risks (Continued)
Ref
Emerging risk
Risk owner
Risk Description
Action plans
ER4
Attracting and
retaining talent
People
and Culture
Director
Talent shortage in the energy
market due to ageing
workforce, limited new/young
talent entering the industry,
cost of living in Jersey (making
it difficult to attract talent from
UK/overseas), lack of economic
advancement opportunities
(livelihood crisis) etc.
New products and services
may require new skills and
experience in our workforce.
•
•
•
•
Review pay against inflation and
benchmark against comparable
jurisdictions.
Defining the Employee Value Proposition.
Offering of rental property to help
international hires.
Tracking turnover and understanding why
employees leave the business / Island.
ER5
Mental Health
Crisis
People
and Culture
Director
Mental health stability, coupled
with livelihood crisis, may
result in pervasiveness of
mental health ailments and/or
disorders negatively impacting
well-being and productivity
(including mental focus to work
safely).
•
•
•
•
Mental health training provided to all staff.
Mental health first aiders within the
business.
Living Leader program enabling
management to identify and support
mental health issues in their team.
Tracking the number of employees on
long- term leave (HR KPI).
ER6
Disruptive
technology
in the energy
sector
Chief
Operating
Officer
Advances in technology
within the renewable energy
sector, bring both unknown
opportunities and threats in
the long term. Failure to adapt
and exploit opportunities will
impact our ability to remain
competitive and meet changes
in customer demands.
•
•
We 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.
ER7
Sophisticated
cyber-attacks
Director of
Technology
Cyber-attacks are part of the
technology landscape today
and will be in the future. No
organisation, government or
person will ever be fully immune
to the effect of cyber-attacks.
Cyber-security risks have
always constantly changed,
but sudden advances with AI
have changed the landscape
with unknown attack vectors
and agencies weaponising
advanced technologies. There
are future risks of increases
in both the volume and
sophistication of cyber-attacks.
•
•
•
We anticipate threats will evolve in areas
such as 5G, Internet of Things, vendor
software integrity, quantum computing and
the use of AI and machine learning.
We are evaluating the impact of AI on
cyber-security and developing AI policies,
controls and awareness training needs..
Forward and modern cyber-security
and technology frameworks that align
with JE technology ambitions and new
operational technology needs must be
evaluated as part organisational changes
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
67
JERSEY ELECTRICITY Annual Report and Accounts 2024
Horizon scanning
Ref
Title
Key
ER1
Competition in energy market
Economical
ER2
Natural resource crisis
Political and Environmental
ER3
Extreme weather event
Environmental
ER4
Attracting and retaining talent
Societal
ER5
Mental Health Crisis
Societal
ER6
Disruptive technology
Technological
ER7
Sophisticated cyber-attacks
Technological
Emerging Risk Table
0 to 2 years
2 to 5 years
5 to 10 years
ER6
ER7
ER3
ER4
ER5
ER2
ER1
The Board regularly review the emerging risks using a risk radar approach to identify the time horizon for each risk. Horizon scanning
is not about predicting the future but to improve our understanding of the risks that may impact our business, including a review of
the potential options and course of actions to mitigate these emerging risks.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
68
JERSEY ELECTRICITY Annual Report and Accounts 2024
Group Risk Management (continued)
Climate Related Disclosures (TCFD)
Jersey Electricity has been reporting
under the guidelines established by
the Task Force on Climate-related
Financial Disclosures (TCFD) since
2022 and continues to follow these
principles in this annual report.
From 2024, the International Sustainability Standards Board
(ISSB) assumes responsibility for the TCFD framework and has
introduced a new framework under IFRS (IFRS S1 and S2), which
is in the process of being endorsed in the UK. Once this has been
confirmed it is anticipated that we will use this IFRS framework
as basis to our reporting in future years.
Governance
Strategy
Risk Management
Metrics & Targets
Compliant
Compliant
Compliant
Compliant
A. Describe the Board’s
oversight of climate
related risks and
opportunities
A. Describe the climate
related risks and
opportunities the
organisation has
identified over the short,
medium, and long term
A. Describe the Board’s
oversight of climate risks
and opportunities
A. Disclose the metrics and
targets the organisation
uses to assess climate
related risks and
opportunities in line
with its strategy and risk
management processes
B. Describe management’s
role in assessing and
managing climate related
risks and opportunities
B. Describe the impact of
climate related risks and
opportunities on the
organisation’s businesses,
strategy and financial
planning
B. Describe management
role in assessing
managing climate related
risks
B. Disclose Scope 1, 2, and
if appropriate Scope 3
greenhouse gas (GHG)
emissions and the related
risks
C. Describe the resilience
of the organisation’s
strategy taking into
consideration climate
related scenarios
including a 2°C or lower
scenario
C. Describe how processes
for identifying, assessing
and managing climate
related risks are
integrated into the
organisations overall risk
management
C. Describe the targets
used by the organisation
to manage climate-
related risks and
opportunities and
performance
against targets
Our Compliance Statement
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
69
JERSEY ELECTRICITY Annual Report and Accounts 2024
Group Risk Management (continued)
Governance
Our governance structure and key roles
and responsibilities are set out in the
diagram on the following page. The
Board retains overall responsibility for
climate related risks and opportunities
and monitors progress of our strategic
priorities, ensuring that the actions
and responses to climate change
risks are proportionate.
Role of the Board
The Board has set out a Vision and Strategy which integrates
achieving net zero for the business as well as supporting and
facilitating the Island’s energy transition into our key strategic
priorities.
Two members of the Board have experience in risk management
and oversight of ESG and sustainability, and this continues to be
enhanced through interactions with management, regulators
and attending conferences and seminars. Please refer to page
87 for the Board’s skill mix.
The Board has delegated the responsibility to the Audit and
Risk Committee for overseeing climate related risks and
opportunities that affect strategic decisions made by the Board.
Management Role
The CEO is ultimately responsible for Jersey Electricity’s
preparedness for adapting to climate change and driving
our strategy. Our Corporate Scorecard measures our overall
performance and is used as a key tool to measure remuneration
for the Executive Leadership Team (ELT). The scorecard is linked
directly to our key stakeholder outcomes to deliver safe, reliable,
affordable and sustainable services and links to both our
sustainability and TCFD objectives.
Our CFO has executive responsibility for risk management and
has established short, medium and long- term planning horizons
to ensure the Company has adequate resources to understand
and respond to climate-related risks.
Our governance framework set out on page 70, enables the ELT
to understand risks and opportunities on climate related issues
and support the business in assessing and taking necessary
actions to ensure the business remains on track with its strategic
objectives and targets relating to climate change.
Sustainability Steering Group
This group is charged with overseeing the company’s
sustainability efforts, ensuring alignment with strategic goals
as well as the identification and ongoing management of
climate related risks. It comprises all members of the ELT, with the
exception of the CEO, one of which has extensive experience
in sustainability and climate related risks. In addition, it also
includes senior leaders from around the business as well as our
sustainability business partner, who is a subject matter expert
in climate change. It receives information from the Environment
and Sustainability Committee and holds delegated authority to
approve sustainability initiatives and projects. These projects are
designed to support the organisation’s decarbonisation efforts,
manage climate related risks and deliver against our stated
climate related targets.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
70
JERSEY ELECTRICITY Annual Report and Accounts 2024
Group Risk Management (continued)
Our Governance Reporting Structure
JE PLC Board
Oversight of company strategy and the long term success of JE
Chief Executive and Executive Leadership Team
Responsibility for the development and implementation of JE’s strategy
and objectives rests with the Chief Executive, who is supported by the ELT
Sustainability Committee and Working Groups
Senior level sponsors and subject matter
experts sets and measure performance
Nominations
Committee
Remuneration
Committee
Audit & Risk
Committee
The Board delegates certain matters to its principal committees
Reporting
Informing
Sustainability Steering Group
Executive and senior management
oversight of sustainability
performance against our
Sustainability Framework
Disclosures and Reporting Group
Ensure compliance with disclosure obligations.
Considering materiality, reliability, accuracy
and timeliness of information disclosed and
assessment of assurance received
Reporting
Informing
TACTICAL
STRATEGIC
REPORTING
Reporting
Informing
Reporting
Reported at each ARC
and Board meeting
CEO and ELT meet every
two months to review
Meets monthly
Informing
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
71
JERSEY ELECTRICITY Annual Report and Accounts 2024
Group Risk Management (continued)
Strategy
Our Planning Horizons
We plan for short-term, medium-term and long-term horizons
to deliver our Purpose and Vision in a sustainable way.
Our integrated approach to business planning considers:
• The material issues for stakeholders and how they affect
the way value is created.
• Our assessment of risks and opportunities.
• Our sustainability commitments, including transition
to net- zero.
Short-term planning for the next financial year sets annual
performance targets for financial and operational performance,
whilst considering delivery of our medium-term goals.
Medium-term planning covers the next five years and is
designed to help us work toward our long-term delivery. It is
focused on maintaining our excellent operational performance,
whilst enhancing our capability, which includes all our resources,
ensuring we fulfil our purpose.
Long-term planning up to 2040 is how we assess and manage
risk and opportunities such as climate change, population
movements, changes in environmental regulations whilst
maintaining an affordable and stable electricity supply with a
modern, responsive service.
Whilst we recognise the importance of conducting a scenario
analysis against a 1.5°C- 2°C temperature increase, for the
purposes of our own analysis, we have also considered reports
prepared for Government where the basis has been the IPCC
(Intergovernmental Panel on Climate Change) RCP8.5 scenario.
This is a pathway where greenhouse gas emissions continue to
grow unmitigated, leading to a best estimate global average
temperature rise of *4.3°C by 2100 (*UK Met office).
Our Risk and Opportunity Assessment
The table below lists out some of the primary climate related
risks and opportunities the organisation has identified
Risk/Opportunity Type
Description
Strategic Response
Physical risks
– extreme weather
(Short, medium
and long term)
Acute weather events and chronic changes to
climate could impact operations for example:
Increased intensity of rainfall and resultant
flash flooding could significantly damage
assets and equipment.
Strong winds could damage power lines or
delay construction projects.
Lack of sufficient water for cooling may
threaten nuclear plants by disrupting the
function of critical equipment and processes.
Changes in regional weather patterns
threaten to impact renewables.
Increased incidence of storms raises costs
of insurance premiums and/or reduces the
number of insurance providers in the market.
Flood surveys to identify assets at risk
are undertaken in conjunction with the
Government of Jersey.
Replacement of overhead cables with
underground cables (a small proportion of the
network is overhead cables).
Alternative on-Island capability to generate
energy.
Monitoring weather patterns and receipt
of timely warnings from Jersey Met and
Government as demonstrated in Storm
Ciarán.
Alternative insurance products may be
investigated to protect assets, such as disaster
bonds.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
72
JERSEY ELECTRICITY Annual Report and Accounts 2024
Group Risk Management (continued)
Risk/Opportunity Type
Description
Strategic Response
Transitional risks
(Short, medium
and long term)
These risks are 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.
The UK is expected to endorse ISSB standards
in 2025, with listed UK companies likely to
be caught in the first wave of reporting. The
ISSB commenced research projects for future
standards, including biodiversity, ecosystems
and ecosystem services. These are likely to be
aligned to TNFD.
Actively engaging with schools and colleges
to encourage careers at Jersey Electricity.
Challenges with recruitment of sufficient
headcount with the required skill sets to
perform functions critical to the delivery of
strategic goals (e.g. engineers, individuals to
carry out reinforcement works or fuel switch).
Working with and supporting the
Decarbonisation Unit within the government.
JE has already begun a TNFD identification,
assessment and reporting programme to
ensure full compliance with the standards.
Broadening our recruitment horizons and
leveraging off our work with diversity and
inclusion to be an employer of choice.
Unknown changes
in demand
(Medium to long term)
Fluctuations in unit sales of electricity due
to higher demand for electricity caused by
subsidies to switch to low carbon heating,
adoption of electric vehicles, energy efficient
produce, requirement for energy efficient
homes, which may result in larger than
anticipated network reinforcement.
Similarly, milder winters and energy efficient
technologies could result in significant loss
of unit sales and therefore under-recovery
against assets installed to fortify the network.
Historical analysis shows that increases in
demand (fuel switches, growing number of
electric vehicles) have not led to any increase
in unit sales, suggesting market growth is
being offset by efficiencies.
Our medium term (5 years) planning
assumptions are that on a weather corrected
basis, unit sales growth will remain stable with
growth being offset by efficiency. Long term
planning assumptions maintain a relative
modest view of unit sales but with an increase
of around 25% at peak demand.
Next generation smart meters (alongside new
metering software) will provide significantly
more data to allow for appropriate network
management strategies which reflect varying
demand.
Opportunities
(Short to medium term)
Moving to a low-carbon economy, driven
by heating switches, adoption of EVs, and
desire for more efficient homes, backed by
incentives, may lead to higher demand of unit
sales of low carbon electricity which would
potentially deliver benefit to all stakeholders.
Through increasing assets, built to manage
change, there is scope for innovation in
products developed.
Increased incidence of heatwaves during
summer could drive growth in domestic
cooling solutions, which could lead to a
change in the demand profile during the
summer.
Transport – provides a network of reliable
public charging stations for electric vehicles.
Heating efficiencies – support low carbon
heating systems with financing options to
meet our customer needs.
Air-to-air heat pump systems can work in
reverse as air-conditioning in summer.
Low carbon lifestyles – help our customers
reduce emissions and become more energy
efficient – My JE app.
Partnering with the commercial industry to
find solutions to help reduce emissions from
waste.
Renewables – further establishment of solar
PV across the Island and investing in wind.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
73
JERSEY ELECTRICITY Annual Report and Accounts 2024
Group Risk Management (continued)
We support our purpose through the supply of low carbon
electricity and developing innovative solutions to enable
customers to make the transition from fossil fuels in a
sustainable manner.
Jersey already has a highly resilient, low-carbon grid, with
spare capacity at all voltages. However, the growth in electricity
usage to meet the Island’s net zero 2050 target is forecasted to
increase peak demand by 25%.
Our strategy is focused on ensuring our business is resilient from
climate change and Jersey has infrastructure that supports and
accelerates the transition to net zero for the Island. Our climate
change strategic actions focus on:
Save Energy - helping customers use less energy (page 43)
• The Big Upgrade - upgrade our network to ensure that it is
resilient to climate change and increasing the capacity of our
network so that it can support the growth in demand from a
decarbonised Island (page 38).
• Long term, green and clean energy - our renewable strategy
focused on replacing and supplementing importation of
energy from France. Our solar 5000 campaign launched in
2024 which sets out our goal to achieve 5000 homes powered
by solar by 2030. In addition to solar we continue to explore
the potential for Offshore Wind, supporting the government
where we can.
• Home and Business solutions to support customers in their
transition from fossil fuels to low carbon energy. Our goals
is to help over 85% of fossil fuel customers switch to clean
energy by 2040, with efficient switching and running costs
(page 42 to 45).
• Public network and private EV charging - we continue to
develop innovative solutions to support customers in the
transition to electric transport. With public chargers available
Island-wide and a platform that is compatible with tens of
thousands of public charging points off-Island, including the
UK and Europe, enabling Islanders to charge abroad through
roaming agreements, by using the app or charging tag
(page 45).
Planning Assumptions and Scenario Analysis
Our baseline planning assumptions are aligned to JE meeting
net zero by 2040 and Jersey being net zero by 2050. These
assumptions are built in to our business planning process so that
we can understand the customer and demand impacts on our
networks and assess our operational requirements, including
our investment, workforce and supply chain requirements.
This base planning assumption is directly aligned with the
Government of Jersey’s Carbon Neutral Roadmap (CNR).
To understand the risks and opportunities to this baseline
we have performed the following scenario analysis:
1.
Falling short – the switch from fossil fuels to electric for
homes, transport and business does not happen at a rate
that will meet the 2050 target.
2. Driving the change – the increase in electrification of
transport occurs more rapidly and goes someway to
offsetting the shortfall in reduction of heating emissions
in scenario 1.
3. Energising the Island – this scenario is an acceleration of
the carbon neutral roadmap and large scale renewables
– such as offshore wind that would require a portfolio of
energy sources to be actively managed.
For each scenario, we understand the impact on our overall
demand profile and customer requirements. As part of this
analysis we identify no regrets investment to ensure flexibility in
our network and offer opportunities to respond rapidly should
acceleration of the CNR start to occur.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
74
JERSEY ELECTRICITY Annual Report and Accounts 2024
Group Risk Management (continued)
Risk Management
Understanding and Managing our
Climate Related Risks
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 other risks.
Furthermore, climate change related risks and opportunities
are integrated within our Business Planning process to ensure
strategic priorities and potential impacts of net zero across the
Island can be understood and aligned with various climate
change scenarios.
Assessments of climate and weather-related risk mitigation
are undertaken when considering new or replacement assets.
Locally, extreme weather events such as the flooding in Grands
Vaux and the significant impacts of Storm Ciarán in 2023 have
tested the resilience of our infrastructure and operations.
Whilst attribution of climate change to specific weather events
is still a growing science, the World Weather Attribution Group
has stated that the storms experienced across the UK and
Ireland during the autumn of 2023, likely saw a 20% increase in
rainfall due to climate change.
As a part of our risk and strategy review, we have explored the
impact of potential flooding on our assets that climate modelling
predicts. These include but are not limited to increasingly
frequent and intense overtopping of coastal defences during
storm events, general long-term sea level rise, and the potential
changes to precipitation rates and patterns arising from
changes in the energy balance, known as radiative forcing, of
the Earth’s atmosphere.
The table below lays out the risks and opportunities the
business has considered in relation to climate change, including
physical risk to our assets. In this context, and when considering
operational resilience, the primary risks relating to Energy assets
have been identified as follows
The Government of Jersey has already undertaken significant
research regarding flood risk, with information included in the
National Oceanographic Centre’s Jersey Sea Level and Coastal
Conditions Climate Review (2018), the Jersey Government’s
Shoreline Management Plan (2020) and AECOM’s Jersey Flood
Risk Assessment Plan (2021). All the modelling has been based
on the RCP8.5 scenario, often considered to be the “worst case”
or “do nothing” scenario encapsulated in the fifth Assessment
Report (AR5) issued by the IPCC.
Understanding how flooding will affect
our assets:
The data from the reports commissioned by the Government,
has, in turn been shared with us, allowing for the mapping
of various flooding risks, broken down by time horizons and
recurrence intervals (also known as return periods). This data
has been incorporated into our own ArcGIS (Geographic
Information System) which allows the risk areas to be clearly
highlighted on maps against our energy assets.
This has enabled us to review both the nature and likely
recurrence of flood risks including, but not limited to, continuity
of business and energy supply to our customers, direct risk to
our assets and potential insurance risks. This information will
form a significant part of planning for replacement and future
asset site locations
Location
Assets
Primary Risk
Mitigation
La Collette
Power station, switchgear,
critical inventories
Coastal flooding
Seawalls, monitoring controls located
at Queen’s Road
Island-wide
Substations
Depending on location,
coastal or general flooding
No substations below ground level,
use of flood risk mapping, network
can be rerouted
Island-wide
Overhead powerlines
Wind storms
Continued replacement of overhead
lines as part of the network upgrade
Archirondel
Shore-end subsea cables,
critical substation
Coastal flooding
This site has been independently
assessed and is considered
sufficiently above existing sea-levels
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
75
JERSEY ELECTRICITY Annual Report and Accounts 2024
Group Risk Management (continued)
“The ISSB commenced
research projects for
future standards, including
biodiversity, ecosystems
and ecosystem services.
These are likely to be
aligned to TNFD. JE has
already begun a TNFD
identification, assessment
and reporting programme
to ensure full compliance
with the standards.”
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
76
JERSEY ELECTRICITY Annual Report and Accounts 2024
Group Risk Management (continued)
Metrics and Targets:
Pathway to Net Zero
The following table shows, at a high level, our actions, and
targets over the short, medium, and long term to achieve our net
zero ambition.
Our strategy and target has been to achieve net zero by 2050,
however, as part of the feasibility study carried out by a third
party, we have now aligned to Science Based Targets (SBTis)
and have accelerated our strategy and targets for JE to achieve
net zero by 2040.
Category
Short Term
(3 years)
Medium Term
(up to 2035)
Long Term
(up to 2040)
Scope 1
100% Electric vehicle fleet by
2025/26 (where suitable vehicles
are available). 90% (2023: 48%) of
our fleet is now fully electric.
Promote the development of
offshore wind (OSW) in Jersey
waters and develop plans to
integrate such generation into the
Jersey supply mix.
Complete construction of a total
of 25MWp of solar generation
on-Island by 2028.
We currently have 4MW in
construction, to be commissioned
January 2025.
Zero marine gas oil will be used by
2030.
Support initiatives to produce and
use hydrogen for transport as a
pathway to the development of
grid scale solutions.
Integration of offshore energy
production to the grid.
Continue solar penetration where
possible.
Combination of on-Island
solutions including Sustainable
Aviation Fuel (SAF) / Hydrotreated
Vegetable Oil (HVO) powered
conventional generation,
hydrogen-based solutions and
short-term storage solutions.
Integration of OSW with other
technologies including hydrogen
or storage.
Achieve a minimum of 5% solar
generation.
Scope 2
Implement a “no regrets” tactical
reduction in our own energy
usage.
Asset standards include the most
up-to-date industry best practice
in driving efficiency of losses in
network assets.
Plan for all upgrading, building
and demolition to apply
circularity principles in tendering,
procurement, and waste
management.
Scope 3
Gain a commitment from the
supply chain to make monthly
returns regarding their emissions
and progress on achieving net
zero.
We have scoped a new reporting
platform to aid transparency with
our supply chain. We are looking
to implement this during 2025.
Only work with suppliers who
have committed to a net zero
transition with tender submissions
including an environmental
statement.
Plan for 100% recycling of end-of-
life products.
Biodiversity
Establish a process for the
monitoring and reporting of our
impacts.
Follow No Net Loss/Net Gain
principles.
Embed Taskforce on Nature-
related Financial Disclosures
(TNFD) reporting requirements in
our data collection.
We have begun the identification
assessment and reporting
programme with TNFD standards.
Calculate the value of ecosystem
service benefits that accrue
from better management of
biodiversity.
Record the number of trees
planted and use this to
calculate the amount of carbon
sequestered.
Create biodiversity champions
within the workforce.
Calculate the carbon sequestered
to form the basis of our own “Gold
Standard” carbon offset scheme.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
77
JERSEY ELECTRICITY Annual Report and Accounts 2024
FY24
FY23
FY22
FY21
Jersey Electricity Grid (Blended) gCO2e/kWh 24.85
25.3
22.2
22.7
Electricity from low carbon sources
94.7%
94.9%
95.3%
95.2%
JE on-Island solar generated (kWh)
1,070,078
903,699
855,898
143,667
Scope 1
Amount (yr)
Unit
Emissions Factor
kg per unit
Total kg
CO2e
Marine Gas Oil (MGO) for JE Generation
560,701
Litres
2.76
1,547,535
Fleet Fuel Petrol
47,095
Litres
2.35
110,673
Fleet Fuel Diesel
62,234
Litres
2.66
165,542
Fleet Fuel HVO
3,068.76
Litres
0.03558
109
Solar
1,070,078
kWh
0.040
42,803
Sulphur hexafluoride (SF6)
0.7
Kg
23,500
16,450
R410A Refrigerant Gases
0.00
Kg
1,924
0.00
Total kg CO2e
Scope 1 Emissions
1,883,113
Scope 2
Amount (yr)
Unit
Emissions Factor
g per unit
Total kg
CO2e
Importation transmission Losses Nuclear
16,052,712
kWh
4
64,211
Importation transmission losses Hydro
8,979,000
kWh
6
53,874
On-Island Distribution Losses
25,820,939
kWh
21.5
555,150
Total kg CO2e
Scope 2 Emissions
673,235
Scope 3
Amount (yr)
Unit
Emissions Factor
g per unit
Total kg
CO2e
Importation EDF Nuclear
391,529,552
kWh
4
1,556,118
Importation EDF Hydro
219,000,000
kWh
6
1,314,000
Importation EFW
32,055,908
kWh
331
10,610,506
Total kg CO2e
Scope 3 Emissions
13,490,624
Climate Related Metrics
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
78
JERSEY ELECTRICITY Annual Report and Accounts 2024
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
Remuneration Committee
Audit and Risk Committee (Chair)
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
Governance, including compliance with
Corporate Governance Code for listed
companies, risk management and oversight
of ESG and Sustainability
Leadership and management
Infrastructure investment
Accountancy, audit and taxation
Governance, including compliance with
Corporate Governance Code for listed
companies, risk management and oversight
of ESG and Sustainability
External Appointments
Chair of Octopus Renewables Infrastructure
Trust Plc
Non-Executive Director of CQS New City High
Yield Fund Limited
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
79
JERSEY ELECTRICITY Annual Report and Accounts 2024
Chris Ambler
Lynne Fulton
Appointed as Chief Executive
1 October 2008
Appointed as Chief Financial Officer
27 July 2023
Nominations 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
Chartered Accountant with over 25 years
experience in Utilities, both regulated and
non regulated. Holding leadership roles
in commercial finance, regulation and
strategic business planning
Leadership and management
Strategy development
M&A and corporate finance
Leadership and management
Deep understanding of utilities and the
energy market.
Strong experience in Economic Regulation,
Sustainability, Strategy Development, M&A,
strategic planning, business transformation
and commercial finance
Non-Executive Director of Foresight Solar
Fund Ltd
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
80
JERSEY ELECTRICITY Annual Report and Accounts 2024
Alan Bryce
Tony Taylor
Tenure on Board
Appointed 17 December 2015
Senior Independent Director
Appointed 21 September 2017
Committee Memberships
Nominations Committee (Chair)
Audit and Risk Committee
Remuneration Committee (Chair)
Nominations Committee
Experience
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
Senior management roles in leading global
advertising agencies
Relevant Skills
Business leadership and governance
Chartered engineer with extensive
knowledge of the utility industry
Asset and operational risk management
Strategic planning and growth
Customer experience
Stakeholder engagement
Marketing and communications
External Appointments
Non-Executive Director of Northern Ireland
Electricity Networks Ltd
Non-Executive Director of Northumbrian
Water Ltd
Non-Executive Director of Jersey Milk
Marketing Board
Non-Executive Director of Channel Radio Ltd
Board of Directors (continued)
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
81
JERSEY ELECTRICITY Annual Report and Accounts 2024
Kayte O’Neill
Amanda Iceton
Appointed 3 March 2022
Appointed 1 June 2020
Audit and Risk Committee
Remuneration Committee
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.
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
Strategic planning
Stakeholder engagement
Digital and cyber skills developed through
work with CPNI and NCSC
Familiarity with UK and US GAAP accounting
Strategy Leadership
Preparation/approval of UK government
and company accounts internationally,
including USA and South Africa
Executive Director on the Board of National
Grid ESO
Non-Executive Director of Paragon ID
Non-Executive Director of Standard Bank
Offshore Group Ltd
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
82
JERSEY ELECTRICITY Annual Report and Accounts 2024
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 11 days (2023: 2 days).
Substantial shareholdings
As at 4 December 2024 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 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.
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 a Jersey incorporated
company. Nevertheless, Jersey Electricity Plc has set out how
they deliver against these duties where appropriate. The Board
of Jersey Electricity Plc considers that it has acted in good faith
and in a manner which it believes promotes the continued
success of the Company, for the benefit of all its stakeholders.
In addition to its shareholders, the Board engages with
Government, local Parishes, suppliers, customers and employees
‘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 registered
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 fund based in the Channel
Islands.
Company Secretary
On 20 May 2024, Fiona Wilson resigned as Company Secretary
and Andrew Welsby, our People and Culture Director was
appointed.
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
18 December 2024
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 2024.
Principal Activities
The Company is the sole supplier of electricity in Jersey. It is
involved in the generation and distribution of electricity and
jointly invests in assets 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 configuration services and consulting.
Dividends
The Directors have declared and paid, and now recommend the following
dividends in respect of the year ended 30 September 2024:
2024
2023
Preference dividends
£
£
5% Cumulative Participating Preference Shares at 6.5%
5,200
5,200
3.5% Cumulative Non-Participating Preference Shares at 3.5%
3,773
3,773
8,973
8,973
Ordinary dividends
Ordinary and ‘A’ Ordinary Shares
Interim paid at 8.40p net of tax for the year ended 30 September 2024 (2023:8.00p net of tax)
2,573,096
2,450,976
Final proposed at 12.00p net of tax for the year ended 30 September 2024 (2023: 11.40p net of tax)
3,675,852
3,492,960
6,248,948
5,943,936
Directors Report: for the year
ended 30 September 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
83
JERSEY ELECTRICITY Annual Report and Accounts 2024
Corporate Governance
The Directors are committed to maintaining a high standard of
Corporate Governance in accordance with The UK Corporate
Governance Code 2018 (“the Code”), as incorporated within
The Listing Rules, issued by the Financial Conduct Authority. The
Listing Rules require the Company to set out how it has applied
the main principles of the Code and to explain any instances of
non-compliance. In accordance with Listing Rule (“LR”) 9.8.4 R,
the agreement related to ‘Independent business’ required by
LR 9.2.2A (2) (a) R has been entered into with the Government of
Jersey, with effect from 17 November 2014. The Company has
complied with the independence provisions included in the
agreement during this financial year and believes the majority
shareholder is also compliant. The other applicable information
required by LR 9.8.4 R (5)/(6) is disclosed in external appointments.
The Directors have reviewed, and applied, the latest UK
Corporate Governance Code applicable to accounting
periods beginning on or after 1 January 2019, together with
the supporting Guidance on Board Effectiveness within these
financial statements. The Code is available at: www.frc.org.uk.
Statement of Compliance
At the time of signing off the 2024 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 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. Policy states an external review will take place every
3 years and internal reviews will be undertaken in the
intervening period. An external evaluation took place during
2024 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 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).
No of meetings
Board
Audit and Risk
Remuneration
Nominations
C. J. Ambler
6
3*
3*
2
P. J. Austin
6
4*
3
2
A. A. Bryce
6
5
0
2
W. Dorman
6
5
0
2
L. G. Fulton
6
5*
2*
0
A. Iceton
6
4
3
0
K. O’Neill
6
4
3
0
T. Taylor
6
2
3
2
* Attendees by invitation
Table A
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
84
JERSEY ELECTRICITY Annual Report and Accounts 2024
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 other
management development programs) and a continued focus on
the safety of both our employees 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.
Corporate Governance (continued)
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
85
JERSEY ELECTRICITY Annual Report and Accounts 2024
Corporate Governance (continued)
There are also specific matters reserved for decision by the
Board. 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). A summary of the key
types of decision made by the Board are as follows:
• Strategy and Management including:
Approval of the Company’s long-term objectives and
commercial strategy
Approval of the annual operating and capital expenditure
budgets and any subsequent material changes to them.
• Changes in structure and capital of the Company
• Financial reporting and controls including:
Approval of the Annual Report and Financial Statements.
Declaration of the interim dividend and recommendation of
the final dividend.
• Internal controls/Risk Management
Reviewing the effectiveness of the internal control and
risk management systems. An external review of the risk
management process is conducted every three years.
• Approval of contracts
Including material contracts, investments, capital expenditure
and bank borrowings.
• Board membership and other appointments
Approval of changes to the structure, size and composition of
the Board and key Committees, following recommendations
from the Nominations Committee.
• 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 attends ARC meetings,
at which risk based internal audit plans are discussed and
approved.
Personnel
The Company ensures that personnel can 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 this report (see the Principal Risks
section on pages 56 to 67).
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, Chief Executive and Chief Financial Officer.
The primary responsibility for relationship matters with listed
shareholders lies with the Chief Financial Officer who reports to
each Board meeting on investor relations. Jersey Electricity also
has several 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 developed.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
86
JERSEY ELECTRICITY Annual Report and Accounts 2024
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.
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;
• To support the Board in its leadership of Company culture
in pursuit of greater Diversity and Inclusion.
Membership and meetings
I am pleased to report on the work of the Nominations
Committee for the financial year ended 30 September 2024.
This will be my final report as I step down from the Board on 31
December 2024, and I would like to thank my colleagues on the
Committee, and Andrew Welsby our People & Culture Director,
for their support throughout my tenure.
The Committee comprises a majority of independent
Non- Executive Directors, the Chair of the Board and the CEO.
There were no changes to the membership during the
reporting period.
The Committee met twice, as recorded below.
Board Structure and Composition
During the period, the Committee maintained its oversight of
the Board Structure and Composition, notably in managing the
selection of two Non-Executive Directors.
Both the Chair of the Audit and Risk Committee and the Chair
of the Nominations Committee (also the Senior Independent
Director) reach the end of their tenure during 2024/25, standing
down at the end of December 2024 and July 2025 respectively.
To ensure a smooth transition, the Committee recommended,
and the Board agreed, to a period of ‘overlap’. Furthermore,
it was decided that a search for two new Non-Executive
Directors (NEDs) should be conducted in a timely manner during
the report period. The process is detailed below, and I am
pleased to report that Iman Hill and Roger Blundell joined the
Board on 1 October 2024.
Nominations
Committee
Report
2023/24 Focus Areas
• Non-Executive Director Recruitment
• Executive Leadership Team development
• Senior Leadership development
Attendance
Meetings
Attended
Alan Bryce
2
2
100%
Phil Austin
2
2
100%
Chris Ambler
2
2
100%
Wendy Dorman
2
2
100%
Tony Taylor
2
2
100%
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
87
JERSEY ELECTRICITY Annual Report and Accounts 2024
Trusted Advisors Partnership, who are independent of the
Company and the Directors, and have acted for us before,
were engaged to conduct the search for the two roles. Having
refreshed our skills matrix, the Board was clear that we should
look for the opportunity to broaden the skills mix around the
Board table, as well as replacing the skills that were deemed
essential including engineering, asset management, audit and
risk management. It was noted that recent appointments had
already considerably strengthened the Board’s expertise in the
electrical energy industry and utilities. TAP engaged with more
than two dozen potential candidates, who were considered
at a meeting of Board members to identify a long list of twelve
candidates for interview. A panel comprising four members of
the Nominations Committee interviewed candidates during May
and selected five to be invited to Jersey in July, meeting with the
other Board directors and executives. Wendy Dorman and I did
not participate at this stage, nor vote in the final appointment
decisions, which were overseen by the Board Chair.
Roger Blundell was CFO at Grosvenor Property UK from 2007-
2022 with overall responsibility for all financial aspects of the
business. He is currently a board member of the UK Government
Property Agency, where he chairs the Investment Committee, a
member of the Council of University College London, where he
chairs the Finance Committee, and is a Trustee of the National
Portrait Gallery, where he chairs the Audit and Risk Committee.
It is intended that Roger will replace Wendy Dorman as chair
of our Audit and Risk Committee during 2025. Iman Hill is an
experienced executive in the oil and gas industry, where
until recently she was CEO of the International Oil and Gas
Producers’ Association. While there, she led the development
of the Association’s carbon transition strategy, supporting the
industry in reducing emissions, and improving performance in
health and safety, and the environment and engineering asset
management. She is currently a NED of United Oil and Gas and
ReconAfrica. She was appointed in August as Country Manager
and Managing Director in Egypt for VAALCO Energy Inc. The
table below showing skills, and diversity reflects the position at
the period end on 30 September 2024. The new appointments
were made after the period end.
During the year our Company Secretary resigned, and was
replaced on an interim basis by Andrew Welsby, our People
& Culture Director. We are grateful to Andrew for his agreeing
again to take on this additional role. The Committee has
overseen the process for recruiting our new Company Secretary.
The selection process came to a conclusion after period end,
and we expect to be announcing the appointment of the
successful candidate shortly.
In line with Listing Rules on board diversity, we make the
following statements for the period end:
• We comply on gender with at least 40% of our Board being
women.
• We comply with at least one of our senior board positions
being a woman, as our CFO is female.
• We do not comply on ethnicity, as none of our Board is from
a minority ethnic background. As described above however,
the Board considers that it will comply in 2024/25, following
the appointment of Iman Hill.
“During the period,
the Committee maintained
its oversight of the
Board structure and its
composition, notably in
managing the selection
of two new Non-Executive
Directors”
Board Mix of Specialist Skills,
Tenure and Gender
Specialist Skills
Tenure
Gender
Board Governance
3
0-3 years
2
Male
4
Operational/Engineering
2
3-6 years
1
Female
4
Digital and Cyber
1
6-9 years
4
Finance and Accounting
4
>9 years
1*
Strategy, M&A
3
Customers and Marketing
3
Energy/Utilities
4
Sustainability and
Climate Change
2
Human Resources
4
*CEO
Ethnic Background
White
8
Mixed/Multiple
-
Asian
-
Black
-
Other Ethnicity
-
Not Specified/Prefer not to say
-
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
88
JERSEY ELECTRICITY Annual Report and Accounts 2024
Nominations Committee Report (continued)
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).
During the year the Committee has continued to monitor
satisfactory progress with the two-year development
programme for our SLT, which flowed from the Norman
Broadbent review in 2023.
Again, at our December meeting, the Committee reviewed the
overall progress with our ELT and SLT development programmes
focusing on succession and potential. The Committee continues
to encourage various initiatives to create developmental
opportunities across the organisation.
For our SLT cohort, Trusted Advisors Partnership (TAP) were
engaged by the ELT to facilitate a 360-degree process for each
member of the SLT. This has informed tailored development for
SLT members. Regarding succession for the ELT, the Company
is continuing to build internal “bench” strength through the
initiatives described above.
Our approach to senior succession remains a mix of external
appointments and internal promotions.
Board Evaluation
This year, we commissioned an externally facilitated board
effectiveness review, which was led by Sean O’Hare of
Boardroom Dialogue, who has no other ties to the Company. The
review included Board and Committee meeting observations
and one-on-one interviews with Directors, the Company
Secretary, and the Executive Leadership Team. In July, the
Board reviewed the findings and discussed actions to enhance
effectiveness.
Boardroom Dialogue’s review painted a positive picture of Board
operations and concluded that the Board and its Committees
are working effectively. The Chair’s leadership and the Board’s
diversity and culture of trust were highlighted.
At a strategic level, the review found that the Board recognised
that the Company has a unique place in the Jersey economy,
with core responsibilities to support the Island’s journey to net
zero. These include continuing to access secure and affordable
low carbon electricity, developing the network, advancing
home energy efficiency, developing renewables, and supporting
the decarbonisation of transport and heat. These are complex
and interrelated challenges, and the Board recognises that its
near-term focus must be to continue to refine its strategic and
investment priorities in these areas.
While the review also concluded that the Board is operating
effectively, areas for improvement were identified and next
steps were suggested. These included to develop a high-level
stakeholder map to record objectives for the year and reflect
on progress as the year progresses; review the current induction
process to see how it can be enhanced, in particular given the
Board recruitment currently taking place; strengthen meeting
administration by further streamlining papers and presentations;
going to the Board and improving adherence to target timelines
for issuing paperwork. Several actions, including enhancing the
Board level induction have already been taken, and an action
plan has been developed, to be reviewed on a regular basis as
the year progresses.
Diversity, Equity and Inclusion (DEI)
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 an even more inclusive workplace culture that both enables
us to attract and retain great and diverse talent. We continue to
track progress using Inclusive Employers’ external assessments,
and are building on our “Established/Bronze”status.
The composition of our employees by gender is presented
below:
Male
Female
Company
75%
25%
First Line Reports
74%
26%
Senior Leadership Team
71%
29%
Executive Leadership Team
84%
16%
Board
50%
50%
Overall, our Company gender balance has remained relatively
static over the last 12 months reflecting a stable workforce with
low turnover in leadership roles.
Jersey Pride
Jersey Electricity’s commitment to diversity, equity, and inclusion
(DEI) remains unwavering. We believe that fostering an inclusive
environment where every individual feels valued and respected
is essential to our success and the well-being of our community.
Our DEI journey this year began as the Gold sponsor for Channel
Islands Pride. This vibrant event brought together Islanders to
celebrate inclusivity and diversity. Many of our JE colleagues
enjoyed the day and it was a great opportunity for us to reaffirm
our commitment to creating a welcoming environment for all
Islanders.
Industry Recognition
We were recognised several times throughout the year for our
DEI achievements and utility industry and local Island awards.
Several JE colleagues won awards at the inaugural UK Women
in Utilities awards for their commitment to our DEI strategy and
JE was short-listed in several categories at the Liberate DIFERA
awards for leader and company of the year.
We employ a diverse workforce which comprises over twenty
different nationalities. To celebrate this, we hosted our first
‘World Culture Day’. This event allowed colleagues to share
traditional dishes from their home countries, fostering a
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
89
JERSEY ELECTRICITY Annual Report and Accounts 2024
Nominations Committee Report (continued)
deeper understanding and appreciation of our varied cultural
backgrounds. It was a joyous occasion that underscored the
richness of our collective experiences.
Gender Pay Gap
Over the last four years, we have successfully halved our gender
pay gap by implementing a data-driven approach. To further
our commitment, we recently hosted a Gender Pay Gap seminar
in collaboration with Inclusive Employers. The event was very
well received sharing our insights and experiences with other
local employers and supporting them on their journeys towards
achieving gender pay equity.
DEI Impact Assessment
This year, we extended and refurbished our Powerhouse shop,
guided by a comprehensive disability impact review. This review
ensured that the needs of all Islanders were considered, making
their experience with us positive and inclusive. Our efforts reflect
our dedication to providing accessible services to everyone in
our community. We also identified an opportunity to make our
defined contribution pension scheme more inclusive with the
addition of Sharia-compliant investment options.
In conclusion, Jersey Electricity remains steadfast in its resolve
to promote diversity, equity and inclusion. We are committed to
creating a workplace and community where every individual
feels valued, respected and empowered to contribute their best.
Our DEI initiatives are not just policies but a reflection of our core
values and commitment to making a difference.
We have continued to build DEI considerations into business
change management and new products and services and
ensuring that we work with like-minded contractors and
suppliers, championed by JE’s Health Safety and Environment
(HSE) team and Procurement teams. Our DEI Working Group,
comprised of employees across the business belonging to
diverse minority groups, has continued its work, and has been
instrumental in shaping the ongoing DEI strategy for the coming
years.
Externally, JE again supported the 2024 Channel Islands Pride
event in September as a gold sponsor. Sponsorship of events like
Pride gives us the opportunity to demonstrate our commitment
to DEI both internally and externally. DEI is an integral part of or
Employer Value Proposition and is key both to attracting and
retaining talented people. It is again gratifying that we have
been asked by other local organisations to share our experience
of D&I best practice and are always happy to provide advice
and support.
Board Apprentice
We have continued to run our board apprenticeship
programme, and Elenor Bouchet joined us in September, as
our fourth Board apprentice. Elenor runs her own marketing
consultancy business in Jersey and supports a number of clients
with their marketing and business strategies. The programme
is designed to encourage greater diversity on the boards of
companies and other public bodies, especially those based in
Jersey.
A. BRYCE
Chairman
18 December 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
90
JERSEY ELECTRICITY Annual Report and Accounts 2024
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. There have
been no changes in membership during the year. I am satisfied
that the current membership brings a good range of skills and
experience, including recent and relevant financial experience
as well as industry knowledge, digital and cyber expertise. Full
biographies of all members are provided on pages 78 to 81.
Five scheduled meetings were held during the year. 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, Chief
Financial Officer, Financial Controller, Director of Technology
and members of both the external audit and internal audit
teams. The Company Secretarial function provides support
on request to the Committee. Following each meeting I report
to the Board on areas discussed and any topics of note and
recommendations that emerged from ARC meetings. All
recommendations from the Committee during the year were
accepted by the Board.
The role of the Committee
The key responsibilities of the Committee are to:
• Oversee the independence, effectiveness and remuneration
of the external auditor and the quality of the audit and
overseeing policy on the engagement of the external auditor
to supply non-audit services.
• Monitor the integrity of the financial statements and report to
the Board on key judgements and significant issues contained
therein.
• Consider, on behalf of the Board, whether the annual
report and accounts, taken as a whole, is 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 control framework and risk management processes.
• Monitor and review the effectiveness of the internal audit
function
• Monitor principal and emerging risks and the robustness
of the risk management framework.
• Review and assess management’s oversight of cyber security
risk to systems, assets, data capabilities and data privacy.
• Review and assess management’s oversight of climate- related
risks and opportunities including the impact of climate change
on strategies, reputation, operations, asset values and capital
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:
• Assessing progress on the Company’s sustainability strategy
and reporting against TCFD recommendations.
• Monitoring energy price volatility and controls in place
to mitigate market and pricing risks.
• Increased focus on date protection and cyber risk
management in light of increasing external threats and
complexity.
Audit and Risk
Committee Report
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
91
JERSEY ELECTRICITY Annual Report and Accounts 2024
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. There were
three incidences of concerns being raised during the year, and
in each case the Committee was satisfied that the appropriate
process was followed to investigate and action as necessary.
External auditors
The Committee has primary responsibility for oversight of the
relationship with the external auditors, PricewaterhouseCoopers
CI LLP (“PwC”). This includes annual assessments of their
performance, effectiveness, quality and objectivity. We
considered the 2024 audit to be effective and of a high quality.
The Committee meet separately with the external auditor
during the year without management present to discuss audit
effectiveness and any issues they would like to raise.
All non-audit services provided to the Group must be pre-
approved by the Audit Committee chair, in addition to going
through PwC’s conflict checks, in accordance with the
Company’s Non-Audit Services Policy. As disclosed in Note 5 to
the Financial Statements, no non-audit services were provided
to the Group by PwC in the year.
Following professional guidelines, the audit engagement
partner rotates after a maximum of five years. Our current audit
partner, Lisa McClure, is in her fifth year, and a succession plan is
in place. Other members of the team are subject to rotation after
seven years, and that will be kept under review.
The Committee will continue to review all aspects of the
relationship with the external auditor and will initiate its next
tender process at an appropriate time, considering the period
since the last tender.
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 considered the five-year detailed business plan for
financial years 2024- 2029 that was presented to the board.
This considered the continued volatility in energy and currency
markets, the outlook for inflation and interest rates, and forecast
capital expenditure and liquidity. Sensitivity analysis carried out
by management based on principal risks was reviewed by the
Committee.
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, which
can be found on the website of the Financial Reporting Council
- www.frc.org.uk. We continually strive to meet the expectations
of public company reporting and enhance the quality of
stakeholder communications.
The Committee has reviewed the changes incorporated into the
revised Corporate Governance Code issued in 2024. The revised
Code contains additional provisions regarding disclosure in the
annual report of the effectiveness of material controls at the
balance sheet date. Although this provision is not effective for
our Company until the year ending 30 September 2027, we have
begun initial preparations in advance.
Task Force on Climate Related 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 third year in
which disclosures are required for the Company. The Audit and
Risk Committee has reviewed TCFD reporting status throughout
the year. We have continued to progress our compliance
with scenario analysis and a review of the resilience of the
organization being carried out under the strategic pillar of TCFD.
Further information can be found on pages 68 to 77. In addition,
we have completed a readiness review of required disclosures
under Taskforce on Nature-related Financial Disclosure (TNFD).
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
92
JERSEY ELECTRICITY Annual Report and Accounts 2024
Audit and Risk Committee Report (continued)
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
93
JERSEY ELECTRICITY Annual Report and Accounts 2024
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 and
estimates 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 2024 annual report and financial statements, taken as a
whole, is 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 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
In my capacity as chair of ARC, I 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 Chief Financial Officer. 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 third-party
suppliers overseen by the Head of Internal Audit. The scope of
internal audit reviews is appraised at the start of each review
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 this year included a focus on
data privacy, cyber security and physical security, with some
moderately rated findings leading to enhanced control
processes and reorganisation of responsibilities.
Risk Management
During the year the Board carried out its annual review of
the Company’s risk appetite and mapping of risk appetite to
principal risks.
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, horizon scanning was performed on
the emerging risks to identify expected timelines of when the
Board believe risks may become realised. As noted in my report
last year, we continue to monitor the implications of geo-political
uncertainty and market volatility on security of supply and price.
These two areas have been considered in depth, despite the
easing of wholesale market pricing since its peak in 2023. This is
likely to continue to be an area of focus in the coming year.
Further details on risks and mitigations are set out in the Group
risk management section on pages 56 to 67.
In July we held an off-site meeting to facilitate a deeper
discussion of principal and emerging risks, involving Board
members and senior management. Topics discussed included
electrification of transport and heating, gearing, people
development and skills, and innovation and technology. A
number of follow up actions emerged, and these are being
worked through over the coming months.
ARC Effectiveness
During the year the Board carried out a self-evaluation of its
effectiveness, including a review of the Audit Committee and
myself as Chair. The review noted some minor administrative
observations but otherwise was satisfied with the work of the
Committee.
I would like to thank members of the Committee, management
and PwC for their continued support throughout the year.
W. DORMAN
Chair
18 December 2024
Audit and Risk Committee Report (continued)
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
94
JERSEY ELECTRICITY Annual Report and Accounts 2024
On behalf of the Board, I am pleased to
present the Remuneration Committee’s
(the Committee) report for the financial
year ended 30 September 2024.
I would like to thank Committee members, Phil Austin, Amanda
lceton and Kayte O’Neill, for their commitment, insights and
valuable contribution during the year in conducting our work.
Four meetings of the Committee took place during the last
financial year, with 100% attendance by all Committee members.
Adhering to the UK Corporate Governance Code, the terms of
reference for the Committee have been reviewed and updated
during this year, and approved by the Board, and they are
available on the Company’s website (www.jec.co.uk).
Remuneration Policy
In line with the authority delegated by the Board, the Committee
defines 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 are relevant degrees of alignment across the
organisation.
JE’s remuneration policy is designed to ensure our executive
compensation model is best placed to 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 to fairly reward them for their contribution to the overall
performance of the Company, over both the short and long term.
Remuneration packages currently comprise basic salary
and benefits plus a variable component in the form of a
performance-related annual bonus. Benefits for Executive
Directors principally consist of membership of a pension scheme,
a car allowance, and private health care.
In setting executive remuneration, the Committee references
relevant local and international benchmarks. During 2024 we
once again engaged Mercer, a highly respected third-party
expert, to conduct a benchmarking exercise for the Executive
Leadership Team (ELT), having carried out an equivalent process
for the Executive Directors in 2022.
Our Methodology
Strategically, the Committee’s prime consideration in setting
targets and reviewing Executive Directors’ remuneration
is the alignment of performance with the key objectives of
the business. For this financial year we evolved our Business
Planning model, which allowed us to enhance the format and
content of our Corporate Scorecard.
Our Executive Annual Bonus Scheme is designed to promote
the short and long-term success of Jersey Electricity and
to incentivise progress in delivering the vision and strategy.
Any bonuses paid to Executive Directors and ELT members
are performance-related, considering delivery against the
Scorecard and personal objectives, which are agreed by the
Committee and approved by the Board before the start of the
financial year.
The Corporate Scorecard includes key metrics such as customer
service/satisfaction, employee engagement, health and safety,
financial performance, and progress on strategic objectives.
Additional strategic objectives include planning for JE’s future
energy supply and demand strategy, procuring energy from
France, and executing an expanded network investment
programme to enhance resilience and support Jersey’s Carbon
Neutral Roadmap.
The Scorecard also has links to both our sustainability and TCFD
objectives, through the delivery of our renewables and network
investment programme.
Remuneration
Committee Report
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
95
JERSEY ELECTRICITY Annual Report and Accounts 2024
The Scorecard is shared across senior leaders in the
business and cascaded to all staff to ensure alignment and
understanding of priorities.
Each Executive Director has a maximum cap on their total
variable pay. These maximum total variable awards are
payable for outstanding performance only. The bonus scheme
was amended in 2018 to allow the Committee the discretion to
defer up to 50% of the award for a period of two years, with the
ultimate payout linked to movements on the listed share price in
the period before vesting. The deferred element of the bonus is
subject to malus and clawback provisions.
The salary and benefits for the Executive team are reviewed by
the Committee each October. In November 2023 both Executive
Directors were awarded increases of 5.5% on base salary,
which was less than the award made to the wider employee
population.
The remuneration of basic salary/fees and bonuses paid in
year, as well as the deferred bonus attributable to the 2020/21
financial year paid in year, to Directors for the year ended 30
September 2024 was as follows:
*Ms Fulton was appointed 23rd July 2023 and therefore the reported 2023 figures are part year.
For the year ended 30 September 2024, the compilation of
the above table, which discloses Directors’ remuneration, has
been changed from prior years’ reporting, to provide a more
accurate depiction of the phasing of bonus payments. The
table shows all amounts actually received, including those
pertaining to deferred bonus as paid to Directors during the
period. Previously, in the annual report for the period ending
30 September 2022, the bonus deferred and earned for the
period ending 30 September 2021, which became payable
during the year ended 30 September 2024, was disclosed as a
bonus payable. The new approach provides a more accurate
disclosure of monies received in the financial year. The prior year
comparative figures have not been adjusted. The above note
will also appear in next year’s accounts as the amount disclosed
and paid will have previously been reported as earned in the
accounts of 2022.
The deferred bonus represents a portion of the bonus payable
to the Executive Directors, attributable to the year ended 30
September 2024. The estimated deferred amount was £52,740
for Mr Ambler and £32,568 for Ms Fulton, which will be payable
October 2026.
In addition to the payments above, the company also made
a payment of £111,603 to Mr M. Magee. £90,362 was in respect
of his final bonus payment relating to the period 1 October 2023
to 30 September 2024 and £21,241 deferred bonus from 2021.
Mr Magee retired as an Executive Director on 23 July 2023.
Service Contracts
The Executive Directors’ service contracts provide for a notice
period of 12 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.
Fixed Pay
Variable Pay
Salary/
fees
£
Benefits
in kind
£
Bonus
paid in year
£
Deferred Bonus
paid in year
£
Total
2024
£
Total
2023
£
Executive Directors
C. J. Ambler
316,808
16,299
115,363
44,195
492,665
464, 210
L. G. Fulton*
220,588
28,757
33,075
-
282,420
41,110
Non-Executive Directors
P. J. Austin
58,000
1,406
-
-
59,406
59,551
A. A. Bryce
36,000
1,406
-
-
37,406
37,551
W. Dorman
35,000
1,406
-
-
36,406
36,551
A. Iceton
32,000
1,406
-
-
33,406
33,551
K. Oneill
34,000
1,406
-
-
35,406
35,551
T. Taylor
34,000
1,406
-
-
35,406
35,551
Total
766,396
53,492
148,438
44,195
1,012,521
743,626
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
96
JERSEY ELECTRICITY Annual Report and Accounts 2024
Renumeration Committee Report (continued)
Notes
1. The nominal increase in accrued pension during the year represents the additional accrued pension entitlement at the year-end compared to the previous year-end,
which can be seen in last year’s Directors Disclosures paper
2. The pension entitlement shown, calculated using the data provided by Jersey Electricity Plc on 4 October 2024, is that which would be paid annually on retirement
at age 60 or at date of calculation if over NRA, based on service at the year-end.
3. The transfer values have been calculated using the basis and method appropriate at each reporting 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 the value of any accrued AVC pensions.
4. The increase in transfer value over the year is after deduction of contributions made by the Director and transfers-in during the year.
5. Along with all other Scheme members, Directors have the option to pay Additional Voluntary Contributions (AVCs) to the Scheme to purchase additional final salary
benefits. AVCs paid by the Directors during the year were nil.
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. The defined benefit scheme has a contribution rate of
20.6% for the employer, and 6% for the employee.
The defined benefit pension scheme provides for no contractual
increases for pensions in payment. It was agreed by the Board at
the time of Mr Ambler’s appointment that he would participate
in a non-contributory version of the defined benefit scheme
(see also page 83, the Statement of Compliance section).
Ms Fulton is eligible to join the defined contribution scheme
but is not yet a member.
Set out below are details of the pension benefits to which
Mr Ambler is entitled. These pensions are restricted to the
scheme in which the Director has earned benefits during service
as a Director but include benefits under the scheme for service
both before and after becoming a Director, including any service
transferred into the scheme from a previous employment.
Increase in
accrued pension
during the year1
Accrued
pension at
30.9.20242
Transfer
value at
30.9.20243
Transfer
value at
30.9.20233
Directors
contributions
during the year5
Increase/(decrease)
in transfer value less
Directors contributions4
C. J. Ambler
£10,893
£102,492
£1,305,156
£1,082,968
-
£222,188
CEO Pay Ratio
The table below shows the CEO pay ratio since 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 increase shown in the table below
reflects a market adjustment to CEO terms following an external
benchmarking review.
Our CEO pay ratio has remained static compared to last year
and is comparable to similarly sized listed businesses.
Year
25th% ile
50th% ile
75th% ile
2024
8.3:1
6.2:1
4.6:1
2023
8.7:1
6.5:1
4.6:1
2022
8.1:1
6.2:1
4.3:1
2021
8.4:1
6.3:1
4.4:1
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 a maximum total of 400 shares
per employee having vested. The last tranche of 100 shares
issued during the 2020 financial year vested 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
Employee engagement is a key aspect of the Corporate
Scorecard. We stimulate engagement through the regular
workforce, engagement and culture forum and initiatives
such as this year’s Power Up 100 (as detailed elsewhere
in this Annual Report).
The Workforce, Engagement and Culture Forum brings
employees together to discuss openly issues and opportunities
and give feedback to the Executive Leadership Team. Each
session is attended by one of our Non-Executive Directors,
providing an ideal opportunity to gain first-hand feedback
from the workforce, which is reported back to the Board.
During the 2024 financial year, the Workforce Engagement and
Culture Forum met three times, on matters such as workplace
culture and wellbeing, facilities, sustainability and internal
communications.
The Company conducts regular employee surveys which
provide valuable data on employee engagement across several
factors, including remuneration.
Non-Executive Directors’ Remuneration
The remuneration of the Non-Executive Directors (NED) is
determined by the Executive Directors, with the assistance of
independent advice concerning comparable organisations and
appointments and considering the Committees in which they
are involved.
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
97
JERSEY ELECTRICITY Annual Report and Accounts 2024
Renumeration Committee Report (continued)
No adjustments were made to NED fees in 2024. A small premium
was paid to those who chaired Committees (Audit & Risk:
£5,000; Jersey Electricity Defined Benefit Pension Scheme:
£5,000; Remuneration: £4,000; Nomination: £2,000) and to those
who were members of the Audit & Risk Committee (£2,000) for
additional responsibility.
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
The total fees were £75,077 of which £15,015 was retained by the
Company.
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:
30.9.2024
30.9.2023
C. J. Ambler
£300,000
£300,000
Directors’ Share Interests
The Directors’ beneficial interests in the shares of the Company at 30 September 2024 were as shown in the table below:
There have been no other changes in the interests set out above between 30 September 2024 and 18 December 2024.
T. TAYLOR
Chair
18 December 2024
A Ord Shares
Preference 3.5%
Shares
Preference 5%
Shares
2024
2023
2024
2023
2024
2023
C. J. Ambler
7,720
7,720
-
-
-
-
A. A. Bryce
4,500
4,500
-
-
-
P. J. Austin
7,000
7,000
-
-
-
-
W. Dorman
3,500
3,500
-
-
-
-
T. Taylor
9,000
9,000
-
-
-
A. Iceton
6,000
6,000
-
-
-
-
K. O’Neill
-
-
-
-
-
-
L.G. Fulton
-
-
-
-
-
-
37,720
37,720
-
-
-
-
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
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 109.
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
The notes on pages 109 to 135 form an integral part of these accounts. The independent auditor’s report is on pages 100 to 104.
Financial Statements
C. J. AMBLER
Chief Executive
18 December 2024
L.G. FULTON
Chief Financial Officer
18 December 2024
98
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
99
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
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 2024, 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 2024;
•
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, comprising material accounting policy information 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
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, Jersey Deep Freeze
Limited (“JDF”) and Jersey Offshore Wind Limited (“JOWL).
• Our audit work was focused on the company as it contributes substantially all of the group’s total assets and profit from operations before
taxation. A lower level of focus was placed on balances and transactions at the subsidiaries, based on our risk assessment and their minor
contribution to the group’s profit from operations before taxation.
Key audit matters
• Recognition of energy and retail revenue.
• Assessment of pension assumptions applied in the valuation of the defined benefit obligation.
Materiality
• Overall group materiality: GBP 756,300 (2023: GBP 740,300) based on approximately 5% of profit from operations before taxation.
• Performance materiality: GBP 567,200 (2023: GBP 555,200).
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.
100
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Independent Auditor’s Report to the Members of Jersey Electricity Plc (continued)
Key audit matters
Key audit matters are those matters that, in the auditor’s professional judgement, were of most significance in the 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 auditor, 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 consolidated financial statements.
The group recognised £108.2m of energy revenue and £17.9m
of retail revenue.
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 consolidated 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 the energy and
retail segments.
We assessed the accounting policy for compliance with the accounting
framework.
We materially matched revenue from the general ledger system to
receipts in the bank statement using data analytics and investigated
material unmatched items.
For energy revenue:
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.
We applied approved tariff rates to the readings from the general
ledger system and recalculated the expected revenue.
We materially reconciled the expected revenue to the invoices raised
to customers from the general ledger system.
For retail revenue:
We evaluated the operating effectiveness of the IT General Controls
surrounding the electronic point-of-sale module within the financial
reporting system and the general ledger system.
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.
Based on the work detailed above, we had no material matters to report
to those charged with corporate governance.
Assessment of pension assumptions applied in the valuation
of defined benefit obligation
Refer to note 1 (Accounting policies), note 2 (Critical Accounting
Judgements and key sources of estimation uncertainty), and
note 16 (Pensions) to the consolidated financial statements.
As at the year-end, the group recognises a surplus in the defined
benefit pension plan of £28.0m. This net surplus comprises £117.3m
of plan assets less £89.3m of estimated plan liabilities.
We consider the valuation of the defined benefit obligation liabilities
to be a key audit matter as the valuation 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 obtained an understanding and evaluated the overall control
environment around the defined benefit obligation.
We assessed the accounting policy for compliance with the
accounting framework.
We confirmed that the group’s actuarial experts are qualified,
appropriately affiliated to third party industry bodies, and are
independent of the group.
We engaged our auditor’s experts to evaluate the assumptions made
in relation to the valuation of the scheme liabilities.
We compared the various assumptions used to our 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. Based on the work detailed above, we had no
material matters to report to those charged with corporate governance.
101
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Independent Auditor’s Report to the Members of Jersey Electricity Plc (continued)
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, the industry in which the group operates, and we
considered the risk of climate change and the potential impact thereof on our audit approach.
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
GBP 756,300 (2023: GBP 740,300).
How we determined it
Approximately 5% of profit from operations before taxation
Rationale for benchmark applied
We believe that the 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% (2023: 75%) of overall materiality, amounting to GBP 567,200 (2023:GBP 555,200) 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 and Risk Committee that we would report to them misstatements identified during our audit above GBP 37,815 (2023: GBP
37,000) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Reporting on other information
The other information comprises all the information included in the Annual Report and Accounts 2024 (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.
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 Directors’ Responsibilities for the Financial Statements, 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.
102
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Independent Auditor’s Report to the Members of Jersey Electricity Plc (continued)
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these consolidated financial statements.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques.
However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target
particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion
about the population from which the sample is selected.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by
the directors.
•
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group’s ability to continue as a
going concern over a period of at least twelve months from the date of approval of the consolidated 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.
103
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Independent Auditor’s Report to the Members of Jersey Electricity Plc (continued)
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 the Group Risk Management 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 of the Annual Report describing the work of the Audit and Risk 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
18 December 2024
104
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Consolidated Income Statement for the year ended 30 September 2024
Note
2024
2023
£000
£000
Revenue
3
135,742
125,078
Cost of sales
(83,184)
(80,924)
Rebate of past energy costs – non recurring item
3
-
3,593
Gross profit
52,558
47,747
Movement in valuation of investment properties
10
(890)
(1,215)
Operating expenses
(37,299)
(32,010)
Group operating profit
3
14,369
14,522
Finance income
2,291
1,871
Finance costs
(1,533)
(1,528)
Profit from operations before taxation
15,127
14,865
Taxation
6
(3,427)
(3,432)
Profit from operations after taxation
11,700
11,433
Attributable to:
Owners of the Company
11,618
11,280
Non-controlling interests
18
82
153
11,700
11,433
Earnings per share
- basic and diluted
8
37.92p
36.81p
Consolidated Statement of Comprehensive Income for the year ended 30 September 2024
Note
2024
2023
£000
£000
Profit for the year
11,700
11,433
Items that will not be reclassified subsequently to profit or loss:
Actuarial gain/(loss) on defined benefit scheme
16
925
(815)
Income tax relating to items not reclassified
6
(185)
163
740
(652)
Items that may be reclassified subsequently to profit or loss:
Fair value loss on cash flow hedges
21
(3,483)
(3,361)
Income tax relating to items that may be reclassified
6
697
672
(2,786)
(2,689)
Total comprehensive income for the year
9,654
8,092
Attributable to:
Owners of the Company
9,572
7,939
Non-controlling interests
82
153
9,654
8,092
All results in the year have been derived from continuing operations.
The notes on pages 109 to 135 form an integral part of these accounts. The independent auditor’s report is on pages 100 to 104.
105
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Consolidated Balance Sheet for the year ended 30 September 2024
Note
2024
2023
£000
£000
Non-current assets
Intangible assets
9
364
681
Property, plant and equipment
10
225,523
216,136
Right of use assets
10
4,621
3,194
Investment properties
10
26,725
27,615
Trade and other receivables
13
300
300
Retirement benefit asset
16
27,952
25,546
Derivative financial instruments
21(ii)
-
129
Other investments
11
5
5
Total non-current assets
285,490
273,606
Current assets
Inventories
12
8,435
9,187
Trade and other receivables
13
24,902
25,959
Derivative financial instruments
21(ii)
-
64
Cash and cash equivalents
49,190
47,429
Total current assets
82,527
82,639
Total assets
368,017
356,245
Current liabilities
Trade and other payables
14
23,027
19,459
Current tax liabilities
6
3,413
3,301
Lease liabilities
15
306
81
Derivative financial instruments
21(ii)
2,601
536
Total current liabilities
29,347
23,377
Net current assets
53,180
59,262
Non-current liabilities
Trade and other payables
14
27,222
26,249
Lease liabilities
15
3,878
3,193
Derivative financial instruments
21(ii)
1,451
225
Financial liabilities - preference shares
17
235
235
Borrowings
15
30,000
30,000
Deferred tax liabilities
6
30,923
31,422
Total non-current liabilities
93,709
91,324
Total liabilities
123,056
114,701
Net assets
244,961
241,544
Equity
Share capital
17
1,532
1,532
Revaluation reserve
5,270
5,270
ESOP reserve
(35)
(35)
Other reserves
(3,241)
(455)
Retained earnings
241,391
235,100
Equity attributable to the owners of the Company
244,917
241,412
Non-controlling interests
18
44
132
Total equity
244,961
241,544
Approved by the Board on 18 December 2024
L.G. FULTON
P.J. AUSTIN
Director
Director
The notes on pages 109 to 135 form an integral part of these accounts. The independent auditor’s report is on pages 100 to 104.
106
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Note
Share Revaluation
ESOP
Other
Retained
Total
Capital
reserve
reserve
reserves*
earnings
£000
£000
£000
£000
£000
£000
At 1 October 2023
1,532
5,270
(35)
(455)
235,100
241,412
Total recognised income and expense for the year
-
-
-
-
11,618
11,618
Movement on hedges (net of tax)
-
-
-
(2,786)
-
(2,786)
Actuarial gain on defined benefit scheme (net of tax)
-
-
-
-
740
740
Equity dividends
7
-
-
-
-
(6,067)
(6,067)
At 30 September 2024
1,532
5,270
(35)
(3,241)
241,391
244,917
At 1 October 2022
1,532
5,270
(38)
2,234
230,232
239,230
Total recognised income and expense for the year
-
-
-
-
11,280
11,280
Amortisation of employee share option scheme
-
-
3
-
-
3
Movement on hedges (net of tax)
-
-
-
(2,689)
-
(2,689)
Actuarial loss on defined benefit scheme (net of tax)
-
-
-
-
(652)
(652)
Equity dividends
7
-
-
-
-
(5,760)
(5,760)
At 30 September 2023
1,532
5,270
(35)
(455)
235,100
241,412
*‘Other reserves’ represents the foreign currency hedging reserve.
Consolidated Statement of Changes in Equity for the year ended 30 September 2024
The notes on pages 109 to 135 form an integral part of these accounts. The independent auditor’s report is on pages 100 to 104.
107
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Consolidated Statement of Cash Flows for the year ended 30 September 2024
2024
2023
£000
£000
Cash flows from operating activities
Operating profit
14,369
14,522
Depreciation, amortisation and impairment charges
14,181
11,581
Share-based reward charges
-
3
Loss on revaluation of investment property
890
1,215
Pension operating charge less contributions paid
(1,481)
73
Deemed interest income from hire purchase arrangements
201
183
Loss/(profit) on sale of property, plant and equipment
1
(3)
Operating cash flows before movement in working capital
28,161
27,574
Working capital adjustments:
Decrease/(Increase) in inventories
752
(2,014)
Increase in trade and other receivables
(1,133)
(3,835)
Increase/(Decrease) in trade and other payables
1,130
(617)
Net movement in working capital
749
(6,466)
Interest paid on borrowings
(1,208)
(1,368)
Preference dividends paid
(9)
(9)
Income taxes paid
(3,301)
(2,089)
Net cash flows from operating activities
24,392
17,642
Cash flows from investing activities
Purchase of property, plant and equipment
(18,036)
(13,046)
Investment in intangible assets
(53)
(92)
Deposit interest received
2,090
1,688
Net proceeds from disposal of fixed assets
34
3
Net cash flows used in investing activities
(15,965)
(11,447)
Cash flows from financing activities
Equity dividends paid
(6,067)
(5,760)
Dividends paid to non-controlling interest
(170)
(165)
Repayment of lease liabilities
(429)
(242)
Net cash flows used in financing activities
(6,666)
(6,167)
Net increase in cash and cash equivalents
1,761
28
Cash and cash equivalents at the beginning of the year
47,429
47,397
Effect of foreign exchange rate changes
-
4
Cash and cash equivalents at the end of the year
49,190
47,429
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 7 and 15. Of the £49.2m cash and cash
equivalents at 30 September 2024, £35.0m (2023: £40.0m) is on fixed term deposits with an average of 93 days remaining (2023: 70 days).
The notes on pages 109 to 135 form an integral part of these accounts. The independent auditor’s report is on pages 100 to 104.
108
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024
1 Accounting Policies
Basis of preparation
The Group’s accounting policies as applied for the year ended 30 September 2024 are based on all International Financial Reporting Standards
(IFRS) issued by the International Accounting Standards Board (IASB) 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 2024 comprises the Company and its subsidiaries.
The Company’s subsidiaries are the entities over which the Company has control. Control is determined by the Company’s power over the
investee, its exposure, or rights, to variable returns and its ability to use its power over the investee to affect the amount of the returns to the
Company.
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 entities
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 must 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 9). The financial position of the Group, its cash flow and its liquidity position are described in the Financial
Review (see page 50). In addition, note 21 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 sufficient financial resources together with many customers both corporate and individual. Therefore, 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 page 55.
Foreign currencies
The functional and presentational 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.
109
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
1 Accounting Policies (continued)
Revenue
The Group recognises revenue from the following services:
i)
Energy sales
Energy sales revenue is recognised on the basis of energy sold to customers during the period as well as fixed daily charges. Revenue
from energy sales is therefore accounted “over time” according to data received from the live smart-meters. Where meters have a
temporary break in communication, it may include an estimated assessment of energy supplied to customers during the period of broken
communications, 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
comprises a distinct performance obligation to the customer. Service connection income is recognised at the point in time that the service is
complete.
Capital contributions arise where a property developer is charged for the provision of a first-time supply to the property/properties. These
charges cover the immediate infrastructure requirements as well as future investment needed to meet the additional demands placed
on existing network infrastructure from new connections. 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. Capital contributions are initially recorded
within deferred income and recognised over the life of the investment to which they relate.
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. JEBS recognises the revenue
over time driven by the stage of completion for each contract, which is usually assessed by reference to costs incurred over the same period.
iv) Property
Rental income is accrued monthly on a straight line basis over the term of the rental agreement.
v) Other
IRU
Indefeasible rights of use (IRU) sales are recognised as the service is provided over the term of the contract.
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. Where agreements extend for substantially all 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.
Jendev
Revenue from Jendev arises from ongoing support contracts and implementation and development contracts. Revenue from ongoing
support contracts are recognised on a straight-line basis over the term of the contract. Revenue from implementation and development
contracts is recognised based on the stage of completion for each contract driven by the cost of work performed.
Jersey Deep Freeze
Jersey Deep Freeze is a 51% (2023: 51%) controlled subsidiary. Revenues are derived from the provision of goods and service contracts.
Revenue from the provision of goods is recognised at point of delivery to the customer. Revenue from service contracts is recognised on a
straight-line basis over the term of the contract.
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.
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
110
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
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 not 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. Deferred tax 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 based on 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
Property, plant and equipment (“PPE”) excludes investment property and is stated at cost less accumulated depreciation and impairment losses.
For assets under construction, all costs incurred which are directly attributable to bringing the asset into use, including direct materials and
labour costs are capitalised as incurred.
Assets are depreciated on the straight-line method to their expected residual values over their estimated useful lives. Property, plant and
equipment under the course of construction is not depreciated until it is commissioned.
Owner-occupied property is classified within PPE.
Depreciation is charged as follows:
Buildings
Up to 50 years
Plant, mains cables and services
Up to 60 years
Interlinks
Up to 30 years
Other, which includes:
Fixtures and fittings
Vehicles
Computer equipment
Up to 15 years
Up to 10 years
Up to 4 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
between current and 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 and an estimate of costs expected to be incurred to dismantle
and remove the underlying asset, and restoring the site or asset to its original condition under the terms of the lease. 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.
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
111
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
1 Accounting Policies (continued)
Impairment of property, plant, equipment and intangible assets
At the end of each reporting period, the Group reviews the carrying amounts of its PPE 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.
The 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 stated 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 a 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. The 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 which is deemed to be fair 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 which is deemed to be fair 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.
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
112
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
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 remeasured 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. Provisions
are included within Trade and other payables.
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.
Under the Scheme regulations, following settlement of the final obligation by the Trust, any remaining surplus held by the fund would be passed
back to the Company.
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 because 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.
113
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
1 Accounting Policies (continued)
Financial instruments (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.
IFRS 17 ‘Insurance contracts’ became effective from 1 January 2023 (1 October 2023 for the Group). The results of an impact assessment of the
Standard indicated that the Group does not enter into contracts that currently meet the definitions and scope of IFRS 17. Therefore, there has been
no past or present impact on the presentation of these financial statements.
Amendments to IAS 12 ‘Deferred Tax related to Assets and Liabilities arising from a Single Transaction’ became effective from 1 January 2023
(1 October 2023 for the Group). Adoption of the amendment has not resulted in a difference in net deferred tax balances within the consolidated
financial statements of the Group.
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, including:
Amendment to IAS 1 - Non-current liabilities with covenants is effective from 1 January 2024 (1 October 2024 for the Group) looks to clarify how
conditions which an entity must comply within twelve months after the reporting period affect the classification of a liability. The amendments also
aim to improve information an entity provides related to liabilities subject to these. The covenant terms relating to the Group’s loan of £30m are
already disclosed in note 15. The amendment to the Standard will be reviewed to ensure continued compliance with disclosures related to this loan.
Amendment to IAS 7 and IFRS 7 - Supplier finance is effective from 1 January 2024 (1 October 2024 for the Group) and requires disclosures to
enhance the transparency of supplier finance arrangements and their effects on an entity’s liabilities, cash flows and exposure to liquidity
risk. The disclosure requirements are the IASB’s response to investors’ concerns that some companies’ supplier finance arrangements are
not sufficiently visible, hindering investors’ analysis. The amendment to the Standards will be reviewed to ensure continued compliance with
disclosure requirements.
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, that the Directors have made in the process of applying the Group’s accounting policies and are
considered to have a 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. 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, Contingent Liabilities
and Contingent Assets) 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
submarine cables 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.
iii) Impairment testing and valuation
The Directors review the carrying amounts of various non-current assets included within property, plant and equipment and intangible
assets to determine whether any impairments need to be recognised against their carrying value in accordance with IAS36, Impairment of
Assets. Where an indicator of impairment or impairment reversal exists, a review of financial outcomes and probability is used to inform the
appropriate carrying value of the impaired asset.
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
114
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
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 2024 was 5.1% (2023: 5.4%).
3 Business Segments
The business segments below are those reported to the Directors for the purposes of resource allocation and performance assessment:
2024
2024
2024
2023
2023
2023
External
Internal
Total
External
Internal
Total
£000
£000
£000
£000
£000
£000
Revenue
Energy – arising during the course of ordinary business
108,102
100
108,202
97,053
89
97,142
Building Services
3,872
936
4,808
3,349
831
4,180
Retail
17,767
110
17,877
18,514
56
18,570
Property
2,346
639
2,985
2,350
641
2,991
Other*
3,655
112
3,767
3,812
466
4,278
135,742
1,897
137,639
125,078
2,083
127,161
Intergroup elimination
(1,897)
(2,083)
Revenue
135,742
125,078
Operating profit
Energy profit before rebate of past energy costs
13,020
9,329
Rebate of past energy costs**
-
3,593
Energy profit including rebate
13,020
12,922
Building Services
248
162
Retail
618
917
Property
931
1,149
Other*
442
587
15,259
15,737
Revaluation of investment properties
(890)
(1,215)
Operating profit
14,369
14,522
Finance income
2,291
1,871
Finance costs
(1,533)
(1,528)
Profit from operations before taxation
15,127
14,865
Taxation
(3,427)
(3,432)
Profit from operations after taxation
11,700
11,433
Attributable to:
Owners of the Company
11,618
11,280
Non-controlling interests
82
153
11,700
11,433
* The Other segment includes the divisions of Jersey Energy and Jendev, operating profit from IRU contracts 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.
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.
** During the year ended 30 September 2023, the Company received a credit which was been disclosed as ‘Rebate of past energy costs – non-recurring item’ within gross profit in these
financial statements.
115
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
4 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 Company at 30 September was as follows:
2024
2023
Number
Number*
Energy
271
258
Other businesses
91
74
Trainees
16
18
378
350
* The methodology for calculating FTEs has been revised during 2024, relating to FTEs employed on a temporary and hourly basis. This has resulted in a restatement of the 2023 reported number
to ensure a like-for-like comparison is presented. This change has no impact to the associated values presented in the prior year in the table below.
The aggregate payroll costs of these persons were as follows:
2024
2023
£000
£000
Wages and salaries
24,496
21,317
Social security costs
1,366
1,184
Pension*
32
1,622
25,894
24,123
Capitalised manpower costs**
(2,605)
(1,772)
23,289
22,351
* The pension costs above relate to the defined benefit pension scheme note 16. The contributions recognised as an expense relating to the defined contribution scheme are included within
wages and salaries and amount to £1.2m (2023: £0.8m).
** Capitalised manpower costs as described in note 1 are those employee costs attributable to bringing assets (PPE and intangible) into use, see note 9 and 10.
5 Group Operating Profit
Operating profit is after charging/(crediting):
2024
2023
£000
£000
Fees payable to Group auditor
Auditor’s remuneration for audit services
430
447
Auditor’s remuneration for non-audit services
-
-
Other operating charges
Depreciation of property, plant and equipment and right-of-use assets (note 10)
11,691
11,203
Amortisation of intangible assets (note 9)
370
378
Movement in expected credit losses
268
240
Impairment of property, plant and equipment*
2,120
-
*The impairment of property, plant and equipment during the year relates to the Energy Segment.
116
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
6 Taxation
2024
2023
£000
£000
Current tax:
Jersey Income Tax - ordinary activities
3,414
3,301
Total current tax
3,414
3,301
Deferred tax:
Current year
13
131
Total tax on profit on ordinary activities
3,427
3,432
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:
2024
2023
£000
£000
Profit from ordinary activities before tax
15,127
14,865
Tax on profit on ordinary activities at standard income tax rate of 20% (2023: 20%)
3,025
2,973
Effects of:
Expenses not deductible for tax purposes
186
343
Income not taxable for tax purposes
(110)
(197)
Profit of group undertaking not available for tax
(32)
-
Non-qualifying depreciation
359
313
Group current tax charge for year
3,427
3,432
The following outlines the major deferred tax (assets)/liabilities recognised by the Group and Company:
Group and Company
2024
2023
£000
£000
Accelerated capital allowances
26,143
26,427
Derivative financial instruments
(810)
(114)
Pensions
5,590
5,109
Provisions for deferred tax
30,923
31,422
Deferred tax movements in the year:
Group and Company
2024
2023
£000
£000
At 1 October
31,422
32,126
Charged to profit and loss account
13
131
Credited to statement of comprehensive income
(512)
(835)
At 30 September
30,923
31,422
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%. 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 23% (2023: 23%) due to the way 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 7.
117
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Per Share
In Total
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
7 Dividends Paid and Proposed
Equity:
2024
2023
2024
2023
pence
pence
£000
£000
Ordinary and ‘A’ Ordinary:
Dividend paid
final for previous year
11.40
10.80
3,493
3,309
interim for current year
8.40
8.00
2,574
2,451
19.80
18.80
6,067
5,760
Dividend proposed final for current year
12.00
11.40
3,677
3,493
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 18.
8 Earnings Per Ordinary Share
Earnings per Ordinary and ‘A’ Ordinary share (basic and diluted) of 37.92p (2023: 36.81p) are calculated on the Group profit attributable to the
owners of the Company, after taxation, of £11.6m (2023: £11.3m), and on the 30,640,000 (2023: 30,640,000) Ordinary and ‘A’ Ordinary shares in issue
during the financial year and at 30 September 2024. There are no share options in issue nor any impact arising from the vesting of the employee
share option scheme and therefore there is no difference between basic and diluted earnings per share.
118
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
9 Intangible Assets
Computer Software
£000
Cost
Cost as at 1 October 2023
2,770
Additions
53
Disposals
(62)
At 30 September 2024
2,761
Amortisation
At 1 October 2023
2,089
Charge for the year
370
Disposals
(62)
At 30 September 2024
2,397
Net book value
At 30 September 2024
364
Computer Software
£000
Cost
Cost as at 1 October 2022
2,740
Additions
92
Disposals
(62)
At 30 September 2023
2,770
Amortisation
At 1 October 2022
1,773
Charge for the year
378
Disposals
(62)
At 30 September 2023
2,089
Net book value
At 30 September 2023
681
The above amortisation charges are included within operating expenses in the consolidated income statement.
The gross carrying amount of intangible assets with a net book value of zero at 30 September 2024 was £1.7m (2023: £1.5m).
119
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
10 Property, plant, equipment, right of use assets and investment properties
Freehold
Mains
Land
Cables
Assets
Right
and
Leasehold
and
Under
of Use Investment
Buildings
Buildings
Plant
Services
Other
Interlinks Construction
Total
Assets
Properties
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
Cost or valuation
At 1 October 2023
38,016
18,130
121,319
111,403
25,392
98,288
- 412,548
3,655
27,615
Additions
352
-
2,178
5,719
1,779
19
13,050
23,097
1,563
-
Revaluation
-
-
-
-
-
-
-
-
-
(890)
Reclassification**
-
-
(1,628)
12,943
(11,315)
-
-
-
-
-
Disposals
-
-
-
-
(485)
-
-
(485)
-
-
At 30 September 2024
38,368
18,130
121,869
130,065
15,371
98,307
13,050 435,160
5,218
26,725
Depreciation
At 1 October 2023
13,369
8,878
77,197
38,789
15,488
42,691
-
196,412
461
-
Charge for the year
773
427
3,798
1,638
1,800
3,119
-
11,555
136
-
Reclassification**
-
-
(436)
8,421
(7,985)
-
-
-
-
-
Disposals
-
-
-
-
(450)
-
-
(450)
-
-
Impairment*
-
-
614
-
-
1,506
-
2,120
-
-
At 30 September 2024
14,142
9,305
81,173
48,848
8,853
47,316
- 209,637
597
-
Net book value at
30 September 2024
24,226
8,825
40,696
81,217
6,518
50,991
13,050 225,523
4,621
26,725
Freehold
Mains
Land
Cables
Assets
Right
and
Leasehold
and
Under
of Use Investment
Buildings
Buildings
Plant
Services
Other
Interlinks Construction
Total
Assets
Properties
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
Cost or valuation
At 1 October 2022
37,610
18,022
118,934
106,047
24,081
98,220
-
402,914
3,610
28,830
Additions
406
111
2,960
5,356
2,075
68
-
10,976
-
-
Revaluation
-
-
-
-
-
-
-
-
45
(1,125)
Disposals
-
(3)
(575)
-
(764)
-
-
(1,342)
-
-
At 30 September 2023
38,016
18,130
121,319
111,403
25,392
98,288
-
412,548
3,655
27,615
Depreciation
At 1 October 2022
12,615
8,462
74,557
37,225
14,245
39,575
-
186,679
330
-
Charge for the year
754
419
3,215
1,564
2,004
3,116
-
11,072
131
-
Disposals
-
(3)
(575)
-
(761)
-
-
(1,339)
-
-
At 30 September 2023
13,369
8,878
77,197
38,789
15,488
42,691
-
196,412
461
-
Net book value at
30 September 2023
24,647
9,252
44,122
72,614
9,904
55,597
-
216,136
3,194
27,615
* A review of asset classifications was undertaken during the period and assets with a net book value of £4.7m, being cost of £12.9m net of depreciation of £8.4m, have been reclassified from
the classes of ‘Other’ and ‘Plant’ to ‘Mains Cables and Services’. The change was mainly related to the Metering asset class.
** Impairments during year include £1.5m against N2 (the oldest of the subsea cables connecting France and Jersey), which is planned for replacement as part of the Group’s capital investment
programme
120
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
10 Property, plant, equipment, right of use assets and investment properties (continued)
Property, plant and equipment
Depreciation is included in operating costs in the consolidated income statement. No depreciation is charged on freehold land. The gross
carrying amount of property, plant and equipment still in use with a net book value of zero at 30 September 2024 was £75.2m (2023: £62.8m).
Right of Use assets
The Group leases land and buildings as part of its Energy business, classified as right of use assets. In addition to the depreciation expense
relating to right of use assets of £136k (2023: £131k), the finance costs included in the consolidated income statement arising from the lease liability
was £155k (2023: £151k). The maturity analysis of lease liabilities is presented in note 15.
Of the £1.6m (2023: £45k) additions to right of use assets during the year, £0.5m (2023: nil) relates to provisions provided for to meet future
obligations to dismantle equipment and restore leased premises to their original condition under the terms of the leases.
Investment properties
Investment properties are made up of a portfolio of commercial and residential properties.
Two commercial leases are held with B&Q and The Medical Centre. 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. A variation of the 2005, 51 year lease for the Medical Centre was
signed in December 2023 which waived the previous break options, with the next available break option date being May 2035. The Company is
obliged to keep the Medical Centre wind, watertight and structurally sound, whilst no obligations exist to the Company with regards to the B&Q
lease which is fully repairing.
The residential properties comprise 29 units which are let out on licences or leases with terms no greater than one year.
The investment properties were valued as at 30 September 2024 by independent professionally qualified valuers who hold a recognised
relevant professional qualification and are based in Jersey with knowledge of the local market. The properties are held for investment purposes,
primarily in freehold ownership and thus the valuation is of the freehold interests based on market value, in accordance with the latest edition
of the Royal Institution of Chartered Surveyors (RICS) Valuation – Global Standards, January 2022 (the “Red Book”). Market value is defined in
the Red Book as “The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a
willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without
compulsion. At each financial year-end the finance department verifies major inputs to the independent valuation report, assesses property
valuation movements and holds discussions with the independent valuer.
Commercial properties have been valued on the basis of an equivalent yield of 6.5% for the B&Q site and 7.0% for the medical centre before
deductions for acquisition costs. Therefore, these are understood to be level 3 fair value. If yields were 50 basis points higher, the valuation of
commercial properties would decrease by £1.0m. If yields were 50 basis points lower, the valuation of commercial properties would increase
by £1.2m.
The movements in level 3 fair values are as follows:
2024
2023
Movement in valuation of Commercial Properties
£000
£000
At 1 October
14,620
15,770
Revaluation
(140)
(1,150)
At 30 September
14,480
14,620
In the case of residential properties, the valuation is based on market value assuming vacant possession. The valuation is based on the
comparable method, by reference to recent local market transactions of similar properties and is therefore deemed to be of level 2 fair value.
The rental income arising from the properties during the year was £1.5m (2023: £1.4m) with maintenance and repair costs of £339k (2023: £331k).
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.
In accordance with IAS40 investment properties are not depreciated. The minimum lease payments receivable are detailed in note 21.
121
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
11 Other Investments
2024
2023
£000
£000
Joint arrangement
5
5
Principal group investments
The Company has investments in the following subsidiary undertakings and a joint arrangement which principally affected the profits or net
assets of the Group.
Country of
incorporation or
principal business
Principal activity
Shareholding
% Holding
Year End
Joint arrangement:
Channel Islands Electricity Grid Limited
Jersey
Administration of cable
5,000 Ordinary
50
30 November
links between France,
Jersey and Guernsey
Subsidiary undertaking:
Jersey Deep Freeze Limited
Jersey
Sale and maintenance
51 Ordinary
51
30 September
of refrigeration and
catering equipment
Jersey Offshore Wind Limited
Jersey
Investment in offshore
2 Ordinary
100
30 September
wind (electricity
generation) projects
Channel Islands Electricity Grid Limited (CIEG)
CIEG is a 50%/50% joint venture between Jersey Electricity Plc and Guernsey Electricity Limited. The principal activity of the business is to
administer the ongoing operations of the cable links between France, Jersey and Guernsey.
The Company’s interest in CIEG is accounted for as a joint arrangement under IFRS 11 ‘Joint arrangements’.
Jersey Deep Freeze Limited
The Company owns 51% (2023: 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 Offshore Wind Limited
This wholly owned subsidiary was incorporated on 29th March 2023. The entity was set up in support to JE’s exploration of offshore wind.
12 Inventories
The amounts attributed to the different categories within inventories are as follows:
2024
2023
£000
£000
Fuel oil
3,618
3,932
Commercial stocks and work in progress
3,288
3,811
Generation, distribution spares and sundry
1,529
1,444
8,435
9,187
During the year £14.6m (2023: £15.1m) was recognised directly in cost of sales in respect of inventories sold or used in operations or production.
122
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
13 Trade and Other Receivables
2024
2023
£000
£000
Amounts receivable withing one year:
Trade receivables
21,528
21,036
Prepayments and other receivables
3,374
4,923
24,902
25,959
Amounts receivable after more than one year:
Secured loan accounts
300
300
Included within trade receivables is £2.7m (2023: £2.3m) that will be due and received in more than 12 months from the balance sheet date.
These amounts represent receipts or payments from customers within the normal operating cycle of the company. Unbilled revenues included
within trade and other receivables at 30 September 2024 are £7.3m (2023: £6.1m).
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.
14 Trade and Other Payables
2024
2023
£000
£000
Amounts falling due within one year:
Trade payables
2,402
518
Other payables including taxation and social security
8,440
10,316
Accruals
11,029
7,796
Deferred revenue
1,156
829
23,027
19,459
Amounts falling due after one year:
Accruals
628
89
Deferred revenue
26,594
26,160
27,222
26,249
The fair value of trade and other payables is considered by the Directors to be equivalent to its carrying value.
123
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
15 Borrowings
Unsecured borrowing at amortised cost
2024
2023
£000
£000
Loan obtained from private placement
30,000
30,000
A long-term loan of £30m was drawn down on 17 July 2014 via a private placement and is in place with Pricoa Capital Group (an affiliate of
Prudential Financial, Inc). The loan consists of two tranches:
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%
The terms of the loan contain financial covenants which require a net debt to regulated asset value ratio of less than 50% and an EBITDA to
borrowings cost ratio greater than 4%, as defined in the loan agreement. The calculations are carried out based on the Group’s interim and
annual performance and position. The Group continues to meet these covenants.
Until July 24, borrowings were supplemented by an unsecured five year £10m revolving credit facility (RCF) with the Royal Bank of Scotland
International Limited (RBSI). The facility expired in July 2024. This facility bore the same financial covenant restrictions as the private placement
above.
A one year £2m overdraft facility also exists with RBSI, which renews annually.
The fair value of the loan obtained from the private placement at 30 September 2024 is considered to be £26.3m (2023: £24.5m) based on the
interest rate offered by UK 15 and 20 year bonds as a proxy to the risk free rate at this date coupled with the deemed credit risk margin included
within the overall rate at the inception of the loan. The loan is classified as level 2 in the fair value hierarchy.
Lease liabilities
2024
2023
£000
£000
At 1 October
3,274
3,320
Additions during the year
1,023
45
Unwind of discount
316
151
Repayment in the year
(429)
(242)
4,184
3,274
As at 30 September:
– Current
306
81
– Non-current
3,878
3,193
4,184
3,274
Right of use assets recognised under lease arrangements are detailed within note 10.
The maturity of future lease liabilities are as follows:
2024
2023
£000
£000
Payable within one year
492
227
After one year but within five years
1,475
908
After five years but within ten years
1,203
1,094
After ten years
5,401
4,980
8,571
7,209
Less: future finance charge
(4,387)
(3,935)
Present value of lease obligations
4,184
3,274
124
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
16 Pensions
Introduction
The Company sponsors a funded defined benefit pension scheme for qualifying Jersey employees – 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 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 39% of
the DBO is attributable to current employees, 8% to deferred pensioners and 53% 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 2024
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 (equities and diversified growth funds) 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
As at 30 September 2024 the Jersey Electricity Pension Scheme (the Scheme) invests pooled funds managed by the Scheme’s fund managers.
The Scheme has an agreed asset allocation strategy as set out below.
Asset class
Actual weighting
Growth Portfolio
68%
Global Equities
26%
Hedge Funds
35%
Multi Asset Credit
7%
Matching portfolio
32%
Liability Driven Investment (“LDI”)
32%
Total
100%
125
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
16 Pensions (continued)
Risk management continued
Within the growth portfolio, Global Equities is expected to outperform the liabilities over the long term. The equity allocation is allocated equally
across three active global equity managers with contrasting investment styles. The Hedge Funds provide diversification to equity markets within
the growth portfolio, whilst still aiming to outperform the liabilities. The Multi Asset Credit allocation offers exposure to the credit universe and has
a more defensive stance than equity. The Trustees also considered ways to further diversify and increase the investment portfolio’s resiliency and
liquidity within the growth pool by introducing a strategy – the Diversified Liquid Credit strategy. This strategy targets offering a diversified fixed
income exposure to asset-backed securities and has a more defensive stance than equity.
The matching portfolio consists of a Liability Driven Investments (LDI) strategy which includes the use of fixed interest government bonds (gilts),
index-linked gilts, cash and various derivative instruments such as swaps and repurchase agreements. The strategy is used with the aim to
match the interest rate and inflation exposure of a portion of the Scheme’s liabilities and help reduce the funding level volatility. Over the year, the
Trustees restructured the LDI strategy and increased the level of interest rate and inflation hedging on the ongoing funding target basis, in order
to more accurately match the movement in assets with the value of the liabilities.
Since Q2 2020, the Scheme has seen a steady improvement in the funding level. Therefore, a de-risking framework was put in place whereby
an improvement in the funding level to a predefined level will trigger a de-risking step, which involves reducing assets in the growth portfolio in
favour of the matching portfolio. The de-risking framework is reviewed by the Trustees on a regular basis and upon changes in the investment
strategy or following market shocks.
The Trustees insure certain benefits which are payable on death before retirement.
Reporting at 30 September 2024
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
Value at
Value at
30 September
30 September
2024
2023
% p.a.
% p.a.
Discount rate
5.1
5.4
Jersey RPI inflation
3.6
3.6
Pension increases in payment
– Short term (year 1)
-
-
– Long term (year 2 onwards)
-
-
Pension increases in payment for pensions purchased with AVCs
3.6
3.6
Salary increase:
– Short term (year 1)
5.0
8.0
– Short term (year 2)
3.6
3.6
– Long term (year 3 onwards)
3.6
3.6
The financial assumptions reflect the nature and term of the Scheme’s liabilities.
126
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
16 Pensions (continued)
Value at 30 September 2024
Value at 30 September 2023
Post-retirement mortality base table
SAPS “S3P” (All) tables for males and
SAPS “S3P” (All) tables for males and
SAPS“S3P” (Mid) tables for females
SAPS“S3P” (Mid) tables for females
with 95% scaling
with 95% scaling
Post-retirement mortality future improvements
CMI 2023 projections
CMI 2022 projections
(A = 0.0%, Sk = 7.0,w2020=w2021=0%,
(A = 0.0%, Sk = 7.0, w2020, w2021 = 0%
w2022=w2023 = 15%) with long-term
and w2022 = 25%) with long-term
improvements of 1.25% p.a.
improvements of 1.25% p.a.
Life expectancy for male currently aged 60
26.3
26.4
Life expectancy for female currently aged 60
28.6
28.5
Life expectancy at 60 for male currently aged 40
27.9
27.9
Life expectancy at 60 for female currently aged 40
30.1
30.0
DB transfers
0% of deferred members are
0% of deferred members are
assumed to transfer out
assumed to transfer out
Age difference
A male member is assumed to be
A male member is assumed to be
3 years older than his wife/partner.
3 years older than his wife/partner.
A female member is assumed to be 1 year
A female member is assumed to be 1 year
younger than her husband/partner
younger than her husband/partner
Proportion married
85% of male members and 62.5% of female
85% of male members and 62.5% of female
members are assumed to be married
members are assumed to be married
at retirement or earlier death.
at retirement or earlier death.
Cash commutation
Active and deferred members commute
Active and deferred members commute
20% of pension at a rate equivalent to
20% of pension at a rate equivalent to
90% of the value of the member’s pension
90% of the value of the member’s pension
The mortality assumptions are based on the recent actual mortality experience of Scheme members and allow for expected future
improvements in mortality rates.
Assets
The Scheme assets are invested in the following asset classes. All assets have a quoted market value in an active market.
Value at
Value at
30 September
30 September
2024
2023
% p.a.
% p.a.
LDI/UK Gilts
37,036
27,709
Equities
30,388
29,650
Diversified Growth Funds
49,222
53,395
Cash and cash commitments
611
358
Total market value of assets
117,257
111,112
Reconciliation of funded status to balance sheet
Value at
Value at
30 September
30 September
2024
2023
Fair value of Scheme assets
117,257
111,112
Present value of funded Defined Benefit Obligation
(89,305)
(85,566)
Funded status and asset recognised on the balance sheet
27,952
25,546
Related deferred tax liability
(5,590)
(5,109)
Net pension asset recognised on the balance sheet
22,362
20,437
127
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
16 Pensions (continued)
2024
2023
£000
£000
Operating cost
Service cost
1,068
1,119
Past service cost (including curtailments)
-
1,383
Administration expenses
374
493
Financing cost
Interest on net defined benefit assets
(1,410)
(1,373)
Pension expense recognised in profit and loss
32
1,622
Remeasurements in OCI
Return on Scheme assets (in excess of) / below that recognised in net interest
(5,654)
3,074
Actuarial losses / (gains) due to changes in financial assumptions
4,115
(1,692)
Actuarial gains due to changes in demographic assumptions
(172)
(1,114)
Actuarial losses due to liability experience
786
547
Total amount recognised in OCI
(925)
815
Total amount recognised in profit and loss and OCI
(893)
2,437
Changes in Defined Benefit Obligation over the year
2024
2023
£000
£000
Opening Defined Benefit Obligation
85,566
86,110
Current service cost
1,068
1,119
Interest expense on DBO
4,457
4,365
Contributions by Scheme participants
420
435
Actuarial losses / (gains) on Scheme liabilities arising from changes in financial assumptions
4,115
(1,692)
Actuarial gains on Scheme liabilities arising from changes in demographic assumptions
(172)
(1,114)
Actuarial losses on Scheme liabilities arising from experience
786
547
Net benefits paid out
(6,935)
(5,587)
Past service cost
-
1,383
Closing Defined Benefit Obligation
89,305
85,566
Changes to fair value of the Scheme assets during the year
2024
2023
£000
£000
Opening fair value of Scheme assets
111,112
112,544
Interest income on Scheme assets
5,867
5,738
Remeasurement gains / (losses) on Scheme assets
5,654
(3,074)
Contributions by the employer
1,513
1,549
Contributions by Scheme participants
420
435
Net benefits paid out
(6,935)
(5,587)
Administration costs incurred
(374)
(493)
Closing fair value of Scheme assets
117,257
111,112
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
128
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
16 Pensions (continued)
Actual return on Scheme assets
2024
2023
£000
£000
Interest income on Scheme assets
5,867
5,738
Remeasurement gain/(loss) on Scheme assets
5,654
(3,074)
Actual return on Scheme assets
11,521
2,664
Analysis of amounts recognised in OCI
2024
2023
£000
£000
Total remeasurement gains / (losses)
925
(815)
Total gains / (loss)
925
(815)
Sensitivity analysis
The tables below set out the impact to the balance sheet and profit and loss from changes to some of the key assumptions in the discount rate,
salary increases, inflation and mortality.
Change
New value
£000
£000
Discount rate: Following a 0.5% p.a. decrease in the discount rate
Pension expense for the following year
618
773
DBO at 30 September 2024
6,577
95,882
Discount rate: Following a 0.5% p.a. increase in the discount rate
Pension expense for the following year
(626)
(471)
DBO at 30 September 2024
(5,884)
(83,421)
Salary increases: Following a 0.5% p.a. increase in the salary increase
Pension expense for the following year
171
326
DBO at 30 September 2024
1,642
90,947
Inflation rate: Following a 0.5% p.a. decrease in inflation
Pension expense for the following year
(181)
(26)
DBO at 30 September 2024
(1,921)
87,384
Inflation rate: Following a 0.5% p.a. increase in inflation
Pension expense for the following year
189
344
DBO at 30 September 2024
1,998
91,303
Mortality: Following a 1 year increase in life expectancy
Pension expense for the following year
262
417
DBO at 30 September 2024
3,877
93,182
129
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
17 Share Capital
Authorised
Issued and
Authorised
Issued and
fully paid
fully paid
2024
2024
2023
2023
£000
£000
£000
£000
‘A’ Ordinary shares 5p each (2023: 5p each)
1,250
582
1,250
582
Ordinary shares 5p each (2023: 5p each)
1,500
950
1,500
950
2,750
1,532
2,750
1,532
5% Cumulative participating preference shares £1 each
100
100
100
100
3.5% Cumulative non-participating preference shares £1 each
150
135
150
135
250
235
250
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 2024 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 (2023:
£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 2024, 7,900 remain within the Trust as unallocated
shares with a combined valuation of £35,000 representing a market value of £4.43 per share. These shares are expected to form part of a future
employee share scheme. The Trust was funded by way of an interest free loan and for accounting purposes is seen as an extension of the Group.
18 Non-controlling Interests
2024
2023
£000
£000
At 1 October
132
144
Share of profit on ordinary activities after taxation
82
153
Dividends paid
(170)
(165)
At 30 September
44
132
Non-controlling interests represent 49% (2023: 49%) ownership of the issued ordinary share capital of Jersey Deep Freeze Limited.
19 Financial Commitments
2024
2023
£000
£000
Contracted
1,111
2,966
Not contracted*
166,250
122,197
167,361
125,163
*Although this sum is approved in principle it is still subject to formal business cases being reviewed in due course.
130
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
20 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:
2024
2023
£000
£000
No later than 1 year
1,643
1,611
Later than 1 year and no later than 2 years
1,457
1,447
Later than 2 years and no later than 3 years
1,106
1,398
Later than 3 years and no later than 4 years
1,106
1,020
Later than 4 years and no later than 5 years
1,106
1,020
Later than 5 years
9,246
9,236
15,664
15,732
21 Derivatives and financial instruments and their risk management
(i) Categories of financial instruments
The carrying values of the financial assets and liabilities of the Group are as follows:
Financial assets
2024
2023
£000
£000
Fair value through other comprehensive income
Derivative financial instruments
-
193
Amortised cost
Secured loan accounts
300
300
Trade and other receivables (excluding prepayments)
21,528
21,036
Cash and cash equivalents
49,190
47,429
71,018
68,765
Financial liabilities
2024
2023
£000
£000
Fair value through other comprehensive income
Derivative financial instruments
4,052
761
Amortised cost
Borrowings
30,000
30,000
Trade and other payables
10,842
10,835
Financial Liabilities – Preference Shares
235
235
41,077
41,070
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 2024, taking into account the effect of forward contracts placed to manage such exposures,
was £2.5m (2023: £2.4m) being the translated Euro liability due for imports made in September but payable in October.
131
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
21 Derivatives and financial instruments and their risk management (continued)
(i) Categories of financial instruments (continued)
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 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.
(ii) 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 financial 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 against ineffectiveness which would 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
2024
2023
£000
£000
Derivative assets
Less than one year
-
64
Greater than one year
-
129
Derivative liabilities
Less than one year
(2,601)
(536)
Greater than one year
(1,451)
(255)
Total net liabilities
(4,052)
(568)
Tax on items recorded through the balance sheet
810
113
(3,242)
(455)
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
2024
2023
£000
£000
Less than one year - operational expenditure
46,165
36,395
Greater than one year and less than three years
27,450
47,227
73,615
83,622
The fair value of currency derivatives that are designated and ineffective as cash flow hedges amount to £nil (2023: £nil). In the current period
amounts of £3.5m net were debited (2023: £3.4m debit) to equity, being a £3.2m fair value loss (2023: £3.2m fair value loss) and £0.3m debit (2023:
£0.2m debit) 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.
The table below provides the reconciliation for the cashflow reserve:
Hedging Reserve
2024
2023
£000
£000
At 1 October
(455)
2,234
Amounts recycled from other comprehensive income to income statement
(324)
(165)
Changes in fair value recognised in other comprehensive income
(3,159)
(3,196)
Tax on items recorded in other comprehensive income
697
672
At 30 September
(3,241)
(455)
Given the limited exposure to foreign exchange rate risk at the year-end no sensitivity analysis has been presented.
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
132
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
21 Derivatives and financial instruments and their risk management (continued)
(iii) Commodity risk Power Purchases
The Group has power purchase agreements with EDF in France. As at 30 September 2024, the import prices, but not volumes, have been
substantially fixed for 2025. 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 by 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.
(iv) 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 2024 outside agreed credit terms are as
follows:
2024
2023
£000
£000
Less than 30 days
1,669
1,454
Greater than 30 days
276
1,108
Greater than 60 days
386
231
Greater than 90 days
488
1,235
2,819
4,028
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. Deposits are requested where credit knowledge of the customer is limited. The
Group works closely with its customers to assist them in effectively managing their bill payments.
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 £23.1m (2023: £26.5m).
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 provision for expected credit losses were as follows:
2024
2023
£000
£000
At 1 October
490
303
Charge for expected credit losses - included within operating costs
268
240
Amounts written (off)/back
(73)
(53)
At 30 September
685
490
Provision of impaired receivables (by age) is as follows:
2024
2023
£000
£000
0-180 days
222
200
181-360 days
351
140
Greater than 360 days
112
150
685
490
133
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
21 Derivatives and financial instruments and their risk management (continued)
(v) 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. Liquid funds are managed daily 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 15. The Group has complied with these requirements throughout the year.
(vi) Liquidity risk
The Group maintains a strong liquidity position and manages the liquidity profile of its assets, liabilities and commitments so that cash flows are
appropriately balanced and all financial obligations are met when due.
Maturity of financial liabilities at 30 September
2024
2023
£000
£000
Less than one year
27,274
21,416
More than one year and less than five years
38,144
35,260
More than five years
40,088
42,767
105,506
99,443
Financial liabilities shown above include interest payments payable on the £30m private placement.
Borrowing facilities
The Group had undrawn borrowing facilities at 30 September 2024 of £2m (2023: £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 expired July 2024.
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
2024
2023
£000
£000
Less than 3 months: cash and cash equivalents and short-term investments
14,190
7,429
Greater than 3 months: short-term investments
35,000
40,000
Interest rate risk
Interest rate exposure on the £30m of private placements borrowing is managed by having fixed coupons.
134
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Notes to the Consolidated Statements for the year ended 30 September 2024 (continued)
22 Ultimate controlling party and related party transactions
Government of Jersey (“GoJ”)
Under IFRS 10, an investor controls an investee only if all three elements of control identified in the standard are present. Although the GoJ holds
the majority voting rights, the Directors have concluded that two of the three elements to establish control are not present, and as a result we
do not consider that the GoJ should be considered an ultimate controlling party. The two elements and the basis for our conclusions are set out
below:
1)
That an investor has control if it has power over the investee, i.e., the investor has existing rights that give it the ability to direct the relevant
activities (the activities that significantly affect the investee’s returns) [IFRS 10]. The GoJ do not have control over Jersey Electricity’s operating
activities and there are no representatives on the Board from the Government of Jersey. Pursuant to Rule 9.2.2 of the Listing Rules, a
Relationship Agreement was signed in 2014 to ensure the GoJ understands the implications of the listed status of Jersey Electricity and that it
cannot control the Company’s operating activities despite their majority ownership.
2)
That an investor has control if it has the ability to use its power over the investee to affect the amount of the investor’s returns [IFRS 10]. The
Jersey Electricity Board set the dividend policy for the Company, and only data that is available to all shareholders is shared with the GoJ.
The Company has elected to take advantage of the disclosure exemptions available in IAS 24 (paragraphs 24 and 25) with regard to the
reporting of;
•
the amount of the transactions,
•
the amount of outstanding balances, including terms and conditions and guarantees,
•
provisions for doubtful debts related to the amount of outstanding balances,
•
expense recognised during the period in respect of bad or doubtful debts due from related parties, on the basis that the GoJ, despite not
being a controlling party, has significant influence by virtue of holding the majority voting rights and by means of legislation, specifically the
Electricity (Jersey) Law 1937.
All transactions are undertaken on an arms-length basis in the course of ordinary business.
Energy from Waste Plant
Jersey Electricity signed a 25-year agreement in 2008 with the Government to purchase electricity produced by the EFW plant and to share
existing facilities with EFW. This agreement gives rise to the high value transactions with the Government during the year with the value of
electricity purchased from the facility during the year being £2.7m (2023: £2.5m) whilst the value of services provided to the plant was £21k
(2023: £0.1m).
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.
2024
2023
£000
£000
Short-term employee benefits
867
951
Post-employment benefits
75
101
Non-Executive Director’s benefits
237
238
1,179
1,290
Phil Austin, who is a Non-Executive Director, was also a Board member of Ravenscroft Cash Management Ltd which provides treasury services to
Jersey Electricity Plc until his resignation in December 2022. Such services are provided on normal contractual terms, similar to their other clients.
135
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
2024
2023
2022
2021
2020
Income Statement (£m)
Turnover
135.7
125.1
117.4
118.6
111.7
Operating profit
14.4
14.5
11.9
20.5
16.2
Profit before tax
15.1
14.9
10.6
19.1
14.8
Profit after tax
11.7
11.4
8.5
16.3
11.7
Dividends paid (£m)
6.1
5.8
5.5
5.2
4.9
Balance Sheet (£m)
Property, plant and equipment
225.5
216.1
216.2
216.6
217.9
Net current assets/(liabilities)
53.2
59.2
51.5
45.3
37.1
Non-current liabilities
(93.7)
(91.3)
(90.8)
(87.5)
(83.0)
Net assets
245.0
241.5
239.4
225.4
205.0
Financial Ratios and Statistics
Earnings per ordinary share (pence)
37.9
36.8
27.2
52.7
37.9
Gross dividend paid per ordinary share (pence)
24.8
23.5
21.8
21.1
20.1
Net dividend paid per ordinary share (pence)
19.8
18.8
17.4
16.9
16.1
Dividend cover (times)
1.9
2.0
1.6
3.1
2.4
Cash at bank/(net debt) (£m)
19.2
17.4
17.4
13.1
5.5
Capital expenditure (£m)
23.2
11.1
10.4
9.9
12.0
Electricity Statistics
Units sold (m)
609
608
613
639
619
% movement
0.2%
-0.7%
-4.3%
3.3%
-1.2%
% of units imported
94.5%
94.5%
95.3%
95.2%
94.7%
% of units generated
0.5%
0.4%
0.3%
0.4%
0.2%
% of units from Energy from Waste
5.0%
5.1%
4.4%
4.4%
5.1%
Maximum demand (megawatts)
163
159
145
170
141
Number of customers
53,726
53,343
52,473
51,912
51,522
Customer minutes lost*
10
4
5
5
5
Average price per kilowatt hour sold (pence)
17.5p
15.8p
14.5p
13.9p
13.6p
Manpower Statistics (full time equivalents)
Energy
271
258^
253
238
199
Other
91
74^
92
88
97
Trainees
16
18^
18
21
9
Total
378
350^
363
347
305
Units sold per Energy employee (000’s)
2,248
2,357^
2,422
2,686
3,112
Number of customers per energy employee
198
207^
207
218
259
*The reported number excludes the impact from Storm Ciarán of 78 CMLs
^ The methodology for calculating FTEs has been revised during 2024, relating to FTEs employed on a temporary and hourly basis. This has
resulted in a restatement of the 2023 reported number to ensure a like-for-like comparison is presented. The years prior to 2023 have been
presented as previously reported.
Five Year Group Summary (unaudited)
136
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Alternative Performance Measures
The tables below provide details for the alternative performance measures disclosed within the annual report.
Return on energy assets
The return on energy assets is defined as the return on capital employed by the Energy Division.
2024
2023
£000
£000
Capital employed by Energy division at 1 October (A)
178,073
178,696
Capital employed by non-Energy Divisions at 1 October
38,063
37,539
Total property, plant and equipment as at 1 October (note 10)
216,136
216,235
Energy operating profit (note 3) (B)
13,020
12,922
% return (B/A)
7.3%
7.2%
5 year rolling average
6.3%
6.2%
Dividend cover
The Dividend cover measures the number of times a company can pay its current level of dividends to shareholders.
2024
2023
£000
£000
Earnings per ordinary share (pence) (A)
37.9
36.8
Net dividend paid per ordinary share (pence) (B)
19.8
18.8
Dividend cover (times) (A/B)
1.9
2.0
137
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
Financial Calendar
2 January 2025
Preference share dividend
21 February 2025
Record date for final dividend
5 March 2025
Annual General Meeting
14 March 2025
Final dividend for year ended 30 September 2024
5 June 2025
Interim Management Statement – six months to 31 March 2025
9 June 2025
Record date for interim ordinary dividend
23 June 2025
Interim dividend for year ending 30 September 2025
1 July 2025
Preference share dividend
16 December 2025
Announcement of full year results
Annual General Meeting
The Annual General Meeting will be held at the Powerhouse, Queen’s Road, St. Helier, Jersey on Wednesday 5 March 2025 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).
138
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
139
JERSEY ELECTRICITY Annual Report and Accounts 2024
STRATEGY GOVERNANCE FINANCIAL STATEMENTS
The Powerhouse, PO Box 45
Queen’s Road, St Helier JE4 8NY
Tel 01534 505460
Fax 01534 505565
email jec@jec.co.uk
www.jec.co.uk
Printed on paper from
a sustainable source.