Impact Of Metering On Customer Satisfaction In Electricity Company (A Case Study Of Eko Distribution Company)
This study was carried out on the impact of metering on customer satisfaction in electricity company using Eko Distribution Company as a case study. The survey design was adopted and the simple random sampling techniques were employed in this study. The population size comprise of the entire staff of Eko Distribution Company. In determining the sample size, the researcher purposefully selected 57 respondents and 50 were validated. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using frequency tables. While the hypotheses were tested using Pearson correlation statistical tool SPSS v23. The result of the findings reveals power supply reliability has a positive impact on the level of customers satisfaction in Lagos. The study also revealed power supply accessibility has a positive influence on the level customer satisfaction in Lagos. The findings of the study further revealed that accuracy in customers electricity bills has a positive effect on the level customer satisfaction in Lagos. Therefore, the study recommends that flexibility of the prepaid metering services should facilitate for ease of use of the prepaid metering system and facilitate more options of payments for tokens. The study also recommends that there should be better service delivery in Nigeria so as to give customer satisfaction. To mention but a few.
Table of Content
- 1.1 Background of the Study
- 1.2 Statement of the Problem
- 1.3 Objective of the Study
- 1.4 Research Questions
- 1.5 Research Hypothesis
- 1.6 Significance of the Study
- 1.7 Scope of the Study
- 1.8 Limitation of the Study
- 1.9 Definition of Terms
- 1.10 Organisations of the Study
Review of Literature
- 2.1 Conceptual Framework
- 2.2 Theoretical Framework
- 2.3 Empirical Review
- 3.1 Research Design
- 3.2 Population of the Study
- 3.3 Sample Size Determination
- 3.4 Sample Size Selection Technique and Procedure
- 3.5 Research Instrument and Administration
- 3.6 Method of Data Collection
- 3.7 Method of Data Analysis
- 3.8 Validity of the Study
- 3.9 Reliability of the Study
- 3.10 Ethical Consideration
Data Presentation and Analysis
- 4.1 Data Presentation
- 4.2 Analysis of Data
- 4.3 Answering Research Questions
- 4.4 Test of Hypotheses
Summary, Conclusion and Recommendation
- 5.1 Summary
- 5.2 Conclusion
- 5.3 Recommendation
1.1 Background to the Study
Prepayment systems allude to the cost made by a buyer for enjoying a particular good or service before consumption. On account of power supply, the unmistakable component of the prepayment system is the inversion of the customary commercialization framework: in which the previous consumers hold consumption credit since they consistently pay for their energy bills and after usage, in the prepayment system such credit is not accessible in light of the fact that the buying and payment of energy are made before usage. Hence, prepaid systems permit customers to use energy only when they have credit in power account, as supply is ceased when such credit is exhausted Gujor and Otasowie (2010).
The prepaid metering system is a new billing approach in the energy sector that includes a superior electronic customer accounts management system. It integrates metering equipment with smartcard technology. It not only provides a utility but also substantial savings in manpower and money, while providing new payment options for customers. It reduces operational costs because it applies paperless revenue collection system and can replace any electromechanical meter in the market (Hangzhou Pax Electronic Technology, 2012).
Internationally, there has been an expansion in the quantity of clients wanting to utilize prepaid meters. For example, in the United Kingdom, there has been a long convention of offering prepaid metering as an alternative to customers. Up to 15-20 percent of clients have pursued the alternative (Chartwell, 2003). Northern Ireland Electricity which has a customer-friendly prepayment system has increased prepayment enrolment to 25 percent (Energy watch, 2005). At Arizona’s Salt River Project, in excess of 50,000 customers (around 6 percent) are on prepaid meters (Chartwell, 2008). In Ontario, Woodstock Hydro reports that 25 percent of residential customers have decided to utilize the prepaid system.
The prepayment technology was at first evolved in South Africa in the late 1980s with the goal of providing energy to an enormous number of low-income and geographically dispersed clients. The framework was at first outfitted to limiting the challenges emerging from clients’ irregular earnings and to conquering the restricted development of the amenities required for the dispatch and reception of credit slips. By the late 1990s, prepayment frameworks were famous in India and in some OECD nations (Estacheet al., 2000), and had likely arrived at their greatest development stage in Great Britain (Waddamset al., 1997). ). In Argentina, prepayment meters were firstly introduced in 1993, when Energía Mendoza Sociedad del Estado (EMSE) put a few running in small shops at the Mendoza Bus Central Station. The experience was later stretched out to different areas in the nation.
In accordance with this, the Nigeria power started prepaid electricity metering in 2006. Nigeria Power adopted prepaid metering to enhance manpower and technological efficiency, the nature of service offered and furthermore engage clients to control the expense of power. At the point when they were presented, it was normal that the prepaid power meters from Power Holding Company of Nigeria (PHCN) would be a relief given the numerous challenges related with postpaid meters. The postpaid system had been of not returning account deposits, customers having no influence over their consumption, unfavourable disconnection, high reconnection fees, corruption during disconnection and reconnection of power and the estimated bills, which would be humorous for their gross errors were it not for the fact that one needed to pay (Kinyoda, 2013). The prepaid meters were accepted that would save electricity and be increasingly advantageous for consumers.
Anyway the vast majority of the prepaid clients are thinking that it is hard to comprehend Electricity Distribution Company of Nigeria’s complex domestic. Tariff, when applied to prepayment because of its ventured nature. To add to this, energy provision organizations cannot monitor the changing demand for domestic customers as certain consumers face challenges of being invoiced for bills that have just been paid just as poor unwavering quality of power.
An inquest into the success of the electricity prepaid metering in Nigeria has shown that so far, several consumers have complained on limited places where one can buy tokens, delay in purchasing electricity token through mobile phone money transfer, long digits or codes and varying rates of units for the same amount (Nyambega, 2011). An investigation carried out by Chege (2012) additionally settled different grievances from Nigeria power customers regarding the prepaid meters. A portion of the grumblings was that prepaid meters do not give the consumers a breakdown of their consumption, bringing doubt that it is costly.
1.2 Statement of the Problem
Nigeria Power Distribution Company embraced prepaid metering to improve on efficiency, the quality of service offered and also empower customers to control the cost of electricity. At its introduction, the expectation was that the prepaid electricity meters from PCHN would be a relief given the many challenges associated with postpaid meters. The postpaid system had been blamed for withholding customers accounts deposits, consumers having no control over their consumption, unpleasant disconnection, high reconnection fees, corruption during disconnection and reconnection of power and the estimated bills, which would be hilarious for their gross miscalculations were it not for the fact that one had to pay (Kinyoda, 2013).
On the other hand prepaid meters, were believed to assist the users save electricity and be more convenient for consumers. However most of the prepaid customers are finding it difficult to understand PHCN‘s complex domestic. Tariff, when applied to prepayment due to its stepped nature. According to Pauline Mathenge (2015), the postpaid system has been blamed for large customer complaints. In addition, energy provision companies are unable to keep track of the changing demand for domestic consumers as some consumers face problems of being invoiced for bills that have already been paid as well as poor reliability of electricity.
An inquest into the success of the electricity prepaid metering in Nigeria has shown that so far, several consumers have complained on limited places where one can buy tokens, delay in purchasing electricity token through mobile phone money transfer, long digits or codes and varying rates of units for the same amount (Nyambega, 2011). There is also an evidence of various complaints from Nigeria power customers regarding the prepaid meters. Some of the complaints were that pre-paid meters do not give the consumers a breakdown of their consumption, breeding suspicion that it is expensive. This study therefore will seek to establish the impact of metering on customer satisfaction in an electricity distribution company by using Eko Distribution Company as a case study.
1.3 Objectives of the Study
The objective of this study is to examine the impact of metering on customer satisfaction in an electricity distribution company by using Eko Distribution Company as a case study.
However, the specific objectives are:
- To determine the impact of power supply reliability of on the level of customer satisfaction in Lagos
- To study the influence of power supply accessibility on the level customer satisfaction in Lagos.
- To examine the effect of accuracy in customer electricity bills on the level customer satisfaction in Lagos.
1.4 Research Questions
The following questions were generated during the course of this study
- What is the impact of power supply reliability of on the level of customer satisfaction in Lagos?
- What is the influence of power supply accessibility on the level customer satisfaction in Lagos?
- What is the effect of accuracy in customer electricity bills on the level customer satisfaction in Lagos?
1.5 Research Hypotheses
The following hypotheses were formulated for this study:
- H01: There is no positive relationship between power supply reliability and the level of customer satisfaction.
- H02: There is no significant relationship between power supply accessibility and the level customer satisfaction.
- H03: There is no significant correction between accuracy in customer electricity bills and the level customer satisfaction.
1.6 Significance of the Study
This study will improve the relationship between the electricity provider and users of prepaid electricity meters. This will enhance customer satisfaction and increase revenue for the organization. It will also ease the rolling out of the prepaid electricity metering project to other areas in the country and not only in Lagos State alone. In particular Nigeria Power is set to benefit in that it will be able to anticipate the challenges and thus improvise mechanisms that will mitigate undesirable effects of prepaid metering. Customers also stand a chance to understand, appreciate and embrace this new technology as far as electricity metering in Nigeria is concerned. This study will also make a contribution to the body of knowledge in prepaid metering.
1.7 The Scope of the Study
The study will be carried out among the staff and customers of Eko Distribution Company, Lagos State, Nigeria. This area has been selected because the use of prepaid electricity meters has been fully implemented.
1.8 Limitations of the Study
One of the limitations of this project is the availability of the staff to be interviewed. The core respondents are the customer service staff who are always busy attending to customer‘s queries. At the same time some of the staff may be reluctant to answer the questions to overcome this limitation. To overcome this problem the researcher will endeavor to explain the importance of the researching increasing knowledge towards reducing the challenges related with related to use of prepaid electricity meters.
1.9 Definition of Significant Terms Used in the Study.
This refers to paying for electricity upfront
Accuracy in Customer Bills:
This refers to bills that are free from errors or estimation.
Customer Consumption Control:
This refers to extent to which the customer is able to influence quantity of power energy that is consumed within a given period.
This is a measure of the extent to which a customer‘s needs are met.
Reliability of Power Supply:
This refers to constant and stable provision of electricity.
This refers to availability tokens from different vending points.
Supply without the customer being disconnected due to nonpayment.
1.10 Organization of the Study
This research work is organized in five chapters, for easy understanding, as follows.
- Chapter one is concern with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
- Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
- Chapter three deals on the research design and methodology adopted in the study.
- Chapter four concentrate on the data collection and analysis and presentation of finding.
- Chapter five gives summary, conclusion, and recommendations made of the study.
Summary, Conclusions and Recommendations:
This chapter summarizes the findings on the impact of metering on customer satisfaction in electricity company using Eko Distribution Company as a study. The chapter consists of summary of the study, conclusions, and recommendations.
5.2 Summary of the Study
In this study, our focus was on the impact of metering on customer satisfaction in electricity company using Eko Distribution Company as a study. The study was specifically carried out to determine the impact of power supply reliability on the level of customer satisfaction in Lagos, the influence of power supply accessibility on the level customer satisfaction in Lagos, and examine the effect of accuracy in customer electricity bills on the level customer satisfaction in Lagos.
The study adopted the survey research design and randomly enrolled participants in the study. A total of 50 responses were validated from the enrolled participants where all respondent were staff of Eko Distribution Company.
Based on the findings of this study, the researcher concluded that;
- There is a positive relationship between power supply reliability and the level of customer satisfaction.
- There is a significant relationship between power supply accessibility and the level customer satisfaction.
- There is a significant correction between accuracy in customer electricity bills and the level customer satisfaction.
Based on the responses obtained, the researcher proffers the following recommendations:
- The study recommends that flexibility of the prepaid metering services should facilitate for ease of use of the prepaid metering system and facilitate more options of payments for tokens.
- The study recommends that there should be better service delivery by NEPA to give customer satisfaction. The company should facilitate customers to buy electricity at affordable prices the company should ensure that there are no hidden charges to customers who buy the minimum and the company staff should treat the customers well.
- The study also recommends that good quality management system should enhance customer satisfaction, address quality requirements of the customer and help an organization to comply with the relevant regulations outlined.
- The study recommends that the organization should aim to comprehend the present and future needs of the customer and work towards meeting these requirements and even exceeding them.
- The study recommends that the organization should be cost effective to facilitate deployment on a large volume. The economic viability should come from reduced operating costs for the utility, upfront cash collection, reduction in customer complaints, odd hour complaints, failure rate of meters. The prepaid metering system should be cheap and easy to start and scalable for out of area sales.
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