CHAPTER ONE
INTRODUCTION
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:
i) To determine the impact of power supply reliability of on the level of customer satisfaction in Lagos
ii) To study the influence of power supply accessibility on the level customer satisfaction in Lagos.
iii) 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
i) What is the impact of power supply reliability of on the level of customer satisfaction in Lagos?
ii) What is the influence of power supply accessibility on the level customer satisfaction in Lagos?
iii) 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:
i) There is a positive relationship between power supply reliability and the level of customer satisfaction
ii) There is significant relationship between power supply accessibility and the level customer satisfaction
iii) 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.
Prepaid meter: 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.
Customer satisfaction: 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.
Supply accessibility: This refers to availability tokens from different vending points.
Supply without the customer being disconnected due to nonpayment
