Power Supply Customer Satisfaction Surveyphillipsconsulting.net/images/files/pcl-power-survey...ELECTRICITY SUPPLY IN NIGERIA: A CUSTOMER SATISFACTION SURVEY 2 1. BACKGROUND Following

ELECTRICITY SUPPLY IN NIGERIA: A CUSTOMER SATISFACTION SURVEY

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Contents

1. Background to the survey

2. Survey Overview

3. Respondent Profile

4. Main findings

5. Conclusion


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1. BACKGROUND

Following the enactment (in 2005) of the Electric Power Sector Reform Act, the Federal Government of Nigeria has been pursuing the implementation of widespread reforms in the local power industry. Key among these have been the disaggregation of the industry into functional autonomous elements, development of the market to attract participation by the private sector, divestment of government’s core interest in major segments of the power value chain and the establishment of relevant regulatory bodies to manage these processes and their outcomes. With the launch of the “New Power Sector Roadmap” in August 2010, government confirmed its readiness to accelerate the pace of the reforms and drive this process.

These ongoing reforms in the Nigerian power sector have generated a lot of interest locally and polarized public opinion.

In order to obtain an informed view of the impact of the reforms on the general public (i.e. appreciation for service delivery standards, overall expectations for the initiative, etc), Phillips Consulting Limited (PCL) carried out a survey from December 15, 2012 to January 31, 2013.

The survey was conducted using an online questionnaire. Emails were sent to contacts in a database of over 9,000 people inviting them to participate by accessing the questionnaire through a generic link. This link was also posted on our Face book, Twitter and Linked In pages, as well as our corporate website – thereby making the survey accessible to a wider audience beyond those individuals contained within our official database. The survey focused on the following areas:

• Supply of Power and Consumption patterns • Availability and Quality of PHCN Product and Services • Consumer satisfaction and opinions on the reforms process

At the end of the survey period, a total of 418 responses had been received from 26 states of the federation. Out of this number, 412 were valid while 6 were invalid (due to reasons of incompleteness of responses).


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2. PROFILE OF RESPONDENTS

A total of 412 people from 26 states participated in the survey - most of whom were from Lagos state (257 respondents), Rivers state (33 respondents) and Abuja (31 respondents).

Figure 1

Other states include: Edo Kwara Kaduna Anambra Plateau Enugu Nassarawa Benue Adamawa Bauchi Kogi Borno Ekiti Bayelsa Ondo Osun Kebbi Niger Cross River Kano

In addition to their states of residence, participants were asked to respond to a number of questions designed to shed some light on their domestic arrangements with regard to electricity consumption and generation. Their responses are presented in Figures 2 – 9.

Lagos 64%

Rivers 8%

Abuja 8%

Ogun 4%

Delta 3%

Oyo 3% Others

10%

Geographic Distribution of Respondents


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Figure 2

Figure 3

Figure 4

Figure 5

24%

55%

14% 7%

How many people reside in your house?

1 to 3 4 to 6 7 to 10 11 and above

22%

17%

42%

15%

4%

How many air conditioners do you have at home?

None 1 2 to 4 5 to 8 9 and above

2%

31%

65%

2% 0%

How many refrigerators/deep freezers do you use at home ?

None 1 2 to 4 5 to 8 9 and above

95%

2% 3%

How do you use electricity at home?

Domestic use Commerical Use Both


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Figure 6

Figure 7

Findings:

The analysis indicates that 55% of our respondents are members of households with about 4 to 6 people who use between 2 and 4 air conditioners and the same number of refrigerators/deep freezers. Most households represented in this survey (85%), as expected, have an electrical meter and are thus legally connected to the power grid. A small percentage, (15%) do not have an electrical meter and would therefore appear to benefit from illegal connections – hence contributing to the losses recorded in power distribution in the country.

It is also pertinent to note that while the slight majority of respondents (57%) have a prepaid card/electrical meter installed, a large number of households (43%) still use the old post paid meters which are in the process of being phased out across the country.

A small number of respondents (2%) carry out commercial operations from their domestic residences.

85%

15%

Yes

No

Is there an electrical meter at your residence?

57%

43%

What kind of meter is it?

Prepaid/card meter

Post paid/ electromagnetic


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3. CONSUMPTION/ SELF-GENERATION

The following responses were obtained when participants were asked about their average monthly consumption and costs of self –generation:

Figure 8

Figure 9

Awareness:

Almost half (48%) of the respondents are not aware of how much power they consume at home in a month, or the unit cost of that power (per kilowatt). This suggests strongly that very little is currently being done with regard to conserving power in residential facilities since most are not even keeping track of their consumption.

The slight majority (52%) of respondents who did know what their average monthly consumption was gave the following feedback: 23% consume between 100 – 200 kilowatts of electricity per month; 18% between 210 – 400 kilowatts; 8% between 410 – 800 kilowatts; 2% between 810 – 1,310 kilowatts; 1% over 1,310 kilowatts.

23%

18%

8%

2% 1%

48%

What is your average monthly power consumption?

100-200kw 210-400kw 410-800kw

810-1300kw Over 1310kw No idea

47%

32%

13% 4% 4%

What is your average monthly electricity bill?

N1000-N5000 N5100-N10000

N10100- N17000 N17100 -N25000

Over N25000


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Average Monthly Spend and Consumption:

Overall, the majority of respondents (i.e. 47%) spend less than N5, 000 per month on electricity from PHCN. The remaining 53% are grouped into those who spend between:

N5, 000 and N10, 000 (32%);

N10, 000 and N17, 000 (13%);

N17, 000 and N25, 0000, and over N25, 000 (4% each) per month on electricity

This information is presented in Table 1 below.

Monthly Spend Monthly Consumption Naira (N) Respondents 100-

200kw 210-

400kw 410-

800kw 810-

1310kw Over

1310kw No idea

1,000 - 5,000 192 69 31 8 0 2 82 5,100 -10,000 132 19 37 15 0 0 61 10,100 - 17,000 52 6 3 7 4 0 32 17,100 - 25,000 17 0 1 3 4 1 8 Over 25,000 19 0 1 2 0 2 14

Total 412 94 73 35 8 5 197 Table 1

Figures 10 and 11 present the responses to question about the ownership and use of electrical power generating sets.

Figure 10

Figure 11

7%

93%

No

Yes

Do you have an electrical power generator?

No Yes

43%

49%

7%

1%

How many generators do you own?

1 2 3 more than 3


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Not surprisingly, 93% of respondents confirmed that they own a generator at home. Indeed, there are more households who own multiple generators – 49% own two; 7% own three and 1% own more than 4 generators – than there are those who only own one (43%).

This dependence on the use, and increasing number of, electrical power generators provides direct evidence of the poor state of power supply in the country.

Figure 12

29% of respondents spend between N1, 501 to N3, 000 per week running their generators; 23% spend between N 3,001 to N 5,000, 18% spend between N 5,001 to N 10,000, 16% spend over N 10,000, while 15% spend less than N 1,500. It can therefore be summarized from Table 1 and Figure 12 that the majority of respondents represent households that consume 100kw to 200kw of power per month. They thus spend:

• N 1,000 to N 5,000 monthly on electricity from PHCN

• N 1,500 to N 3,000 on running

their generators weekly (i.e. N 6,000 to N 12,000 monthly)

Thus most of our respondents currently spend between N 7, 000 to N 17, 000 monthly on power in their homes.

9

46

107

85 68

44

14

How much do you spend in running power generators per week?


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4. QUALITY OF PRODUCT & SERVICES

Respondents were asked their opinion of the quantity and quality of PHCN power supply, with regards to:

Frequency and quality of power supply Customer satisfaction Customer’s preference/ willingness to pay monthly tariffs

Frequency of Power Supply

The charts below show the response to the questions asked.

Figure 13

Figure 14

Figure 15

Figure 16

2%

19%

49%

27%

3%

On the average, about how many hours of power supply do you have

daily?

0 I to 3 4 to 8 8 to 18 19 to 24 6%

18%

17% 59%

How often do you experience power failure at home daily?

Once twice Thrice More than thrice

15% 6%

37%

31%

11%

How long does each power failure last for?

12-24 hrs 0-1 hr 2-4 hrs

5 -8 hrs over 24hrs

12%

23%

14% 28%

23%

How often do you have low current or partial power supply at home?

Bi-monthly Daily Monthly Quarterly Weekly


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Findings

Majority (49%) of respondents indicated that power is supplied to their homes for between 4 and 8 hours daily. On the other hand, the majority (59%) of respondents experience power failure more than three times daily. For 37% of respondents, these power cuts last for 2 to 4 hours while for 31%, the period is 5 to 8 hours. 28% of the respondents indicated that they experience ‘low current’ or partial power supply quarterly.

An analysis across the different categories was conducted, with a focus on the respondents that experience power failures more than three times per day. We found that:

• 57.1% have power for about 4 to 8 hours daily, 24.2% have about 1 to 3 hours, 16.7% have for about 8 to 18 hours, 2% have no power at all, while only 0.4% say they have power for about 19 to 24 hours daily.

• 36.5% experience power failures that last for 2 to 4hours, 26.2% for 5 to 12 hours, 18.5% for 12 to 24 hours, 15% for over 24 hours, while only 3.8% experience power failures for less than an hour daily.

• 30.8% experience low current or partial power daily, 24.4% experience this weekly, 22.1% experience this quarterly, 13.1% experience this monthly and 9.5% experience this bi-monthly. This suggests that even when power is supplied , it is often of low/poor quality

How many hours of power supply do you have per day?

How often do you experience Power failure in a day?

Hours Respondents Once Twice Thrice More than Thrice

0 7 0 3 0 4 1 to 3 77 5 7 7 58 4 to 8 203 3 26 37 137 8 to 18 114 11 38 25 40 19 to 24 11 8 1 1 1 Total 412 27 75 70 240 Table 2

How long does power failure last?

How often do you experience power failure in a day

Hours Respondents Once Twice Thrice More than Thrice

0 to 1 24 6 5 4 9 2 to 4 148 10 24 29 85 5 to 12 126 5 33 27 61 12 to 24 60 3 8 6 43 Over a day 45 3 5 2 35

Total 403 27 75 68 233 Table 3


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How often do you have low current or partial power supply to your house?

How often do you experience power failure in a day

Frequency Respondents Once Twice Thrice More than Thrice

Daily 87 1 7 11 68 Weekly 86 4 13 15 54 Monthly 52 3 11 9 29 Bi-monthly 44 2 12 9 21 Quarterly 106 14 21 22 49

Total 375 24 64 66 221 No response 37 - - - - Table 4


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Customer Satisfaction

Respondents were asked to rate the quality of power supply between September 2012 and January 2013 – a period in which the country effectively had no Minister of Power. Their responses to this question are presented below, in addition to a few others bordering on quality of service from PHCN.

Figure 17 Figure 18

Figure 19

Figure 20

3%

38%

33%

26%

How would you rate power supply in your area from September 2012

till date?

Excellent Improved

No Improvement Deteriorating

25%

75%

Do you contact PHCN to resolve issues related to power supply

and metering?

No Yes

18%

79%

3%

How do you report faults in your area to PHCN?

Telephone Visit to PHCN office On Site

9%

23%

29%

15%

24%

How long does it take for faults to be rectified?

1-6hrs 12-24hrs 2-3 days

1-2 weeks Indefinite


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Findings

Power supply during the period

The majority i.e. 59% of the respondents expressed their dissatisfaction with the services provided since September 2012 (33% of them feel that there has been no improvement while the other 26% feel the power supply has actually deteriorated).

41% of the respondents were satisfied with the services provided during the period (38% of them feel that there has been an improvement while the other 3% say that power supply to their areas has been excellent).

Speed of response

For 29% of respondents, it takes 2 – 3 days to rectify any faults with metering or power supply. This is further underlined by the 24% who say they wait indefinitely to get a response to complaints from PHCN. A smaller number (23%) rate the response time at12-24 hours; 15% at 1-2 weeks while only 9% said they’re given solutions in less than 6 hours.

Customer complaints

79% of the survey respondents visit PHCN offices to report faults, fewer people contact PHCN via telephone (18%) or onsite (3%). Indeed our findings show that visiting the PHCN office to make complaints is the most efficient way to get a rapid response. 62% of respondents whose issues were rectified within 2 to 3 days, made their complaints at the relevant PHCN office. Also 61.4% of those who had their issues rectified in less than 24 hours also made complaints at the office.

A cross analysis of the different categories was conducted, with a focus on respondents who expressed their dissatisfaction with the power supply in their neighborhood (refer to tables below). We found that:

• When respondents were asked if they contacted PHCN to resolve issues related to power supply and metering, as many as 1 in 4 responses were negative. This shows a great lack of faith in the ability of PHCN staff to resolve issues/complaints effectively and professionally

• 30% get their problems resolved within 2 to 3 days, while 29.9% never get their problems resolved.

Do you contact PHCN to resolve issues related to power supply and metering?

How would you rate the power supply in your area from September 2012 to date?

Options Respondents Excellent Improved No improvement

Deteriorating

Yes 292 9 112 91 80 No 99 3 36 38 22

Total 391 12 148 129 102 No response 8 Table 5


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How long does it take for faults to be rectified?

How would you rate the power supply in your area from September 2012 to date?

Hours/days Respondents Excellent Improved No improvement

Deteriorating

1- 6hrs 36 3 21 5 5 12 -24hrs 86 2 43 25 14 2-3 days 109 4 36 35 32 1-2 weeks 55 0 16 0 13 Indefinitely 89 1 20 30 36

Total 391 10 136 121 100 No response 8 Table 6

Billing preferences

Respondents were asked a few questions relating to their current electrical power billing arrangements.

The charts below show the responses to the questions asked:

Figure 21

Figure 22

4%

9%

72%

15%

How do you recharge your meter?

Online Scratch Card PHCN Office Ban

41%

59%

Yes

No

Are you willing to pay a monthly service charge?

Yes No


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Figure 23 Findings

• 72% of respondents recharge their meters at PHCN offices. The second largest group (15%) comprises those who do so at a bank. Very few recharge their meters remotely – either via the use of recharge cards (9%) or online (4%)

• The current PHCN practice in which a monthly service charge is deducted from customer payments proved to be quite unpopular with most of the respondents (59%). Only 41% support the practice

• If power supply from PHCN could be guaranteed daily, 39% of respondents are willing to pay N10, 000 for uninterrupted power monthly; 6% want to spend N20, 000 and 4% would pay over N20, 000. However, the majority (51%) want to pay between N1, 000 and N5, 000.

Considering that most respondents spend between. N 7,000 and N 17,000 monthly on both PHCN bills and self-generation (as indicated in section 3 above), Figure 23 implies that only 10% of respondents are willing to pay more than the upper limit (N 17,000) of this range.

Figure 24 confirms that most respondents prefer the new pay-as-you-go metering system – 78% of them do not want to return to the old metering system. This is further corroborated by Figure 25

39%

6% 4%

51%

How much will you want to pay as monthly tariff, if you can forego the weekly cost in powering your generator?

N10,000 N20,000 Over N20,000 Others

Figure 24

Figure 25

78%

22%

No

Yes

Would you prefer to be billed instead?

1%

42%

4%

53%

How frequently will you want to be billed?

Weekly Monthly Quaterly No Response


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5. CONCLUSION Respondents were asked to give their opinion on the power reform process:

Summary

The survey confirmed that most respondents are not satisfied with the current state of power supply in the country.

In addition to the issues discussed in the previous sections, respondents were asked to individually rate the 3 major challenges currently facing power supply in Nigeria. Their responses included:

• Irregular/ inconsistent power supply • High tariffs • Voltage fluctuations • Frequent power outages due to over loaded transformers • Poor response time from PHCN staff • Non-availability of the new prepaid meters • Poor customer service

There is therefore a clear need for the newly licensed power companies to not only improve the supply of power to Nigerians, but also provide an improved customer service experience to customers via better awareness, improved speed of service delivery, integration of easier modes of transactions and use of better billing systems.

It must be noted that a large proportion of respondents believe that the ongoing reforms will improve the state of power supply in the country. This is the message that should drive the future decisions and actions by government, relevant agencies, as well as current and intending investors in the sector. This survey was conducted by the Business Advisory Services Division

Figure 26

Though many respondents showed their dissatisfaction and frustration with the current situation, 41% stated that they believe the ongoing reforms will improve power supply in the country. 50% indicated they were not sure what to expect while only 9% stated they had no faith in the reforms. This indicates that a large percentage of respondents are convinced that power supply and accompanying services provided will improve with the ongoing reform. 9%

41%

50%

No

Yes

Not sure

Do you believe that the ongoing reforms will improve power supply in

the country?

No Yes Not sure


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Disclaimer The information contained in this survey is for general information purposes only and represents only the views and opinions of respondents and not essentially that of Phillips Consulting Limited. In no event will Phillips Consulting Limited be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of or in connection with the use of the information contained in the survey. © 2013 PCL Business Advisory Services Division is focused on assisting investors in start-ups and project management, conducting diagnostic studies, applying scenario based planning, facilitating board retreats and business policy alignment, driving performance improvement initiatives, supervising business turnarounds and sustaining total quality management. Our work is practical, with a strong emphasis on implementation. The division's engagements are with major public and private organizations across various sectors of the economy.

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Power Supply Customer Satisfaction Surveyphillipsconsulting.net/images/files/pcl-power-survey...ELECTRICITY SUPPLY IN NIGERIA: A CUSTOMER SATISFACTION SURVEY 2 1. BACKGROUND Following