Jersey Electricity plc is a utility company providing the island of Jersey with the importation, generation and distribution of electricity. They supply electricity to 50,000 domestic and commercial customers. In addition to Energy, they have other interests in Retail, Building Services, IT, Environmental Engineering and Property.
The Innovar team have been working with Jersey Electricity plc for 10 years supporting the Finance team improve their planning budgeting and forecasting systems as their business needs evolve.
Earlier in 2017, Innovar ran a competition in our newsletter with a bottle of champagne as the prize. Gregor Wake, Financial Controller at Jersey Electricity won the prize and was presented with the bottle during a regular account meeting in June 2017. Presenting Gregor with his Champagne provided an ideal opportunity to talk with Gregor in a little more detail about planning in the Energy industry.
How Important Is Planning to Jersey Electricity?
“Its hugely important. We forecast every month making adjustments that depend on multiple factors which could include actuals to date and of course the weather. Being on a small island in the English Channel, weather can change incredibly quickly so we need to be flexible.
Our annual process starts in May and is very detailed. This forms part of our 5 year plan which is still fairly detailed but not quite so detailed as Year 1. We also do a 15 year plan around our Energy capex.
Our planning is probably more important than reporting.
We have pretty strict timeframes for our planning processes and I’m pleased to say our Managers are switched on to the timetable. They know the need for and importance of the planning process.
Our planning process has actually become much easier than it used to be. But ultimately our plans link back to tariffs for every customer on the island of Jersey which emphasises the point on how important planning is to the business.”
What are your biggest planning challenges?
“At the moment its FX, Pensions and Maintenance and Repair costs. Our network is very well maintained, however the timing of any maintenance and repair spend can vary. As 95% of our energy is imported from France FX can have an impact. The pound to Euro rate has varied significantly recently and future predictions range widely. Whilst we do our best to manage this there is always some uncertainty when you take a very long term view of FX rates. Our FX hedging protects us in the short to medium term”
How are your planning processes evolving?
“In the 4 years I have been with the business, I have certainly seen changes. The process is now much more collaborative with more involvement across the business and more input from business units and departmental managers.
Going forward we will look at the impact and timing of costs much more directly.
We will also look at getting further usage of finance related systems across multiple aspects of the business not just within the finance department. Modelling our supply and distribution with our French suppliers and pricing are two immediate areas that spring to mind.”
How have Innovar helped Jersey Electricity?
“I think the main areas is in the open dialogue we have with them. They helped us assess different software products providing a variety of options. Once we had chosen the most suitable product for us they provided training, consultancy, coaching and ongoing business support. Jersey Electricity have been working with Innovar for many years and they have a very good understanding of our business and our culture. We make a good partnership. They are responsive and prompt at getting back to us and this is appreciated.”
Finally, any advice on how to get the best out of a Planning Consultant?
“Be open, honest and up front with them. Build a relationship and they will respond the same way.
The consultant should become part of your team so make them feel welcome, comfortable and encourage lots of questions. Its simply teamwork.
I would also encourage the consultant to let their customer win a game of golf every now and again. From a Jersey Electricity point of view, it will help the mood of my Financial Accountant a great deal!”