The electric power sector is generally product-oriented. The primary goals are centred around maintaining a reliable electricity system, ensuring competition between power generators, distribution companies, and related matters. Little attention is paid to consumer engagement and orientation. There is no gainsaying that consumers want so much more than just a competitive market. They want a customer experience that matches their needs, wants, and desires.
The power sector of many developing countries is undergoing various stages of reform. For instance, the Nigerian electricity sector reform began as far back as 2005 with the Electric Power Sector Reform Act (EPSRA) and is still ongoing. However, only major stakeholders within the Nigerian Electricity Supply Industry (NESI) seem to be aware of these reforms’ details or relevance. As a result, many consumers are left in the dark. Moreover, an average Nigerian does not understand the rationale behind the power sector reforms, the stages of the reform, and the impact on their daily life.
This article analyses the communication gap between major stakeholders in the power sector and the consumers with a proposition to bridge this gap through strategic consumer engagement and orientation.
The Communication Gap
In general terms, customer engagement is the emotional connection between a customer and a brand. It has been established that highly engaged customers buy more, promote more, and demonstrate more loyalty. Similarly, customer orientation is a business philosophy that puts the customer’s needs over the needs of the business. It is a way of thinking that aligns the business goals with its customer’s goals. Customer-oriented companies recognize that customers are the business.
One could argue that all the reforms in the power sector aim to ensure reliable and adequate power supply to consumers. Whilst this is true; however, the key questions are: Do consumers perceive these reforms as being consumer-centric? Do consumers understand the details of these reforms, their relevance, and how it affects them? Are they allowed to participate in the decision-making process? Are consumers psychologically, mentally, and physically prepared for the changes being introduced in the power sector? Do consumers feel valued as key players in the Sector? Unfortunately, the answers to these questions are largely negative.
The absence of customer orientation and engagement explains the constant uproar by consumers at any slight change they perceive to be detrimental to their interest. No doubt, the reforms have are being introduced for the ultimate benefit of consumers. Nevertheless, as long as consumers are not carried along or positioned to understand the changes, they will treat it with utmost antagonism.
A case in hand is the pricing of electricity tariffs. Nigeria has been adjudged to have one of the lowest electricity tariffs in the world. As of December 2020, the price of electricity in Nigeria is 0.059 U.S. Dollars per kWh for households and 0.097 U.S. Dollars per kWh for businesses. For comparison, the average price of electricity in the world for that period is 0.136 U.S. Dollars per kWh for households and 0.122 U.S. Dollars for businesses. Now, the general consumer orientation in Nigeria is that electricity is a social service to be provided by the Government at no cost. With this mindset, it is difficult, if not impossible, to get consumers to pay a subsidized tariff for power consumed, let alone paying a cost-reflective tariff.
To illustrate further, the Nigerian Electricity Regulatory Commission (NERC) recently issued the MAP and NMMP Regulation, 2021, to rapidly bridge the metering gap. This Regulation is no doubt for the benefit of electricity consumers. However, there was little publicity about it. Granted, the NERC typically holds stakeholder meetings, but how many ordinary Nigerians attend such events? The big players in the Sector mostly attend the stakeholder engagements. A random survey reveals that ordinary Nigerians who live in middle and low-income areas have no clue about the Regulation, which should otherwise be for their benefit. Likewise, the ordinary electricity consumer is unaware of the frameworks or modalities for obtaining a prepaid meter under the new Regulation. Policymakers should have effected massive media campaigns (i.e. Television, newspaper, radio jingles) to educate Nigerians on the metering efforts.
The Distribution Companies are not left out. As it stands, there is a cold war between consumers and DisCos. DisCos are regarded as ‘enemies’. As a result, the consumer-DisCos’ relationship can be said to be tumultuous often. Reports of consumers destroying DisCos’ infrastructure or beating up their staff are common. An average consumer does not understand why the DisCos should disconnect their power supply for failing to pay for a service that he believes should be free. There are a plethora of complaints around improper handling of consumer grievances on estimated billings and the likes. Other examples abound that reflects the disconnect between the NESI and the consumers which it exists to serve. Thus, to make progress in this Sector, key stakeholders must alter these negative perceptions. In the business circle, “Customer is King”. As such, efforts must be made to win the favour, loyalty and commitment of electricity consumers.
Recommendations
Consumer reorientation is needed to change the status quo. Through radical and intense publicity, campaigns, grass-roots engagement, town hall meetings, consumers can, over time, be made to understand that electricity is like every other paid service. Consumers need to know that it is not just enough to pay, but payment has to match the cost of producing electricity. For estimated billings, the regulator and DisCos should inform consumers on the basis for and matrix of arriving at the estimated bills. This heightened enlightenment and advocacy apply to consumer rights and obligations within the Sector.
These engagements ought not to be a one-off exercise; they must be the ongoing cultivation of relationships between the NESI and consumers. It ought to be an engagement that goes far beyond a single transaction or reform but one that anticipates consumers’ needs, interests, disposition and keeps them abreast of developments in the Sector. This approach will foster lasting relationships, reduce cases of uproar, promote loyalty, and hence, expeditious growth of the power sector. A good place to start is radical and ongoing media campaigns on television, radio, social media platforms.
Consumers at all levels need to have a sense of belonging and feel that they are a part of the reform process. Stakeholders, particularly the DISCOs and the Regulator NERC, can create ongoing platforms that actively interact with consumers with information that interests, educates, or motivates them. Engagement and orientation must be intentional, strategic, and consistent in such a way that delivers value to consumers. Consumers at all levels should know why reform decisions are taken, how they benefit them and how they will be protected. Another tactic is to get the support of trade unions and civil societies and ensure that the leaders of these bodies pass the information to their members.
With proper orientation and engagement, consumers will be more inclined to comply with regulations and guidelines issued by the Government and the NERC. As it is said, it is always a better approach to promote compliance than enforcement. With consumers’ buy-in on reform strategies, issues around electricity theft, non-payment of bills, and other breaches will be largely reduced.
The above notwithstanding, it is pertinent to note that actions must back these engagements with consumers. Mere words without execution will only last for a short while before consumers realize that they are being deceived. Hence, as consumers actively engage in reform processes, market participants must take steps to implement whatever is promised. Policymakers must keep their words to keep the confidence and loyalty of the consumers.
With widespread positive engagements and reorientation of Nigerians at every stage of reform, the transition of the electricity market to the fully competitive stage will be quicker and more seamless.
It is not enough to carry out positive reforms; the beneficiaries of the reform must perceive the same to be in their interest. Therefore, the NESI must set up engagement strategies that connect with consumers’ concerns at all levels from the commencement of any reform to its end.