PREFERENCE FOR SERVICE BANDS AND CUSTOMER SATISFACTION IN THE POWER SECTOR: A CONJOINT ANALYSIS STUDY

Abstract

The study examined consumer preference for Service-Based Tariff (SBT) electricity bands and its impact on customer satisfaction. The SBT categorizes consumers into service bands (A–E) based on the promised hours of electricity supply, with the aim of aligning tariffs with service quality. Using a survey of 5000 electricity consumers in Osun State, conjoint analysis was used to assess consumer preference for key service attribute’s including reliability of supply, tariff cost, compensation mechanisms and voltage stability. In addition, the study evaluated the level of satisfaction on the four key service attributes. The results revealed that reliability of supply emerged as the most valued attribute (40%), followed by tariff cost (25%), compensation for service shortfalls (20%), and voltage stability (15%). The results further highlight widespread dissatisfaction, with 75% of respondents expressing dissatisfaction with the reliability of electricity supply, and 65% feeling their tariff band does not reflect the actual service they receive. This study emphasizes the importance of aligning tariffs with actual service delivery, and it offers policy recommendations for improving service consistency, enforcing service standards, and transparent tariff adjustments to enhance customer satisfaction and emotional well-being. By examining consumer preferences for these different service attributes, the study aims to inform policy decisions that will improve service delivery and enhance satisfaction among electricity users.