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Our Business and Business Model
Our core operations include the transmission, distribution, generation and supply of electricity and the provision of energy related services for which we operate several other complementary businesses. We build, operate and invest in low-carbon electricity infrastructure, including a smart-enabled grid. We seek to create value for customers and our Island community by providing highqualityaffordable services, and create value for shareholders by providing a fair return on assets consistent with the rate of return of typical regulated entities in the UK over the long-term. The more units of energy we distribute across the network,themoreefficient it becomes to operate due to economies of scale and theunitisationoffixedcosts. This helps us to maintain lower and more competitive prices and will, we believe, enable Jersey to transition to net-zero by 2050 more cost effectively.
We take a long-term view of our business and the services we provide, focusing on being cost effectiveandefficientwhilst managing risk. Our risk management framework* helps us to meet our strategic,financialand operational objectives whilst enabling us to take measured risks that incentivise innovation and growth.
*More information on our Group Risk Management is detailed on page 58-65 We seek to deliver a sustainable ‘return on assets’ to our shareholders that is consistent with the rate of return of typical regulated entities in the UK, and a return that enables the Company to continue to borrow and invest for the future. Our target return on assets employed continues to be 6%-7% over the long term and was 4.2% in 2022 but 6.2% on a rolling five-yearbasis. Our pricing model aims to provide stable risk-adjusted returns for our investors, who we aim to compensate forthatrisk.Thisconfidence of investors – both shareholders and lenders – enables us to make longterm strategic decisions and large investments in infrastructure and services. This, in turn, ensures we can deliver a robust, reliable network, now and for the future.
