Abstract:
Electricity is one of the essential components of basic human needs. Though, it is
challenged by soaring incidence of irregular outages, low electricity access rate and high
power system losses. These facts duly affect customer satisfaction, perceived quality and
image of the company. The purpose of this study was to ascertain customers’ satisfaction
of electricity in Harari region. To achieve the stated objectives, primary data was collected
using close ended questionnaires from 385 resident customers. The measurement of
customer satisfaction was made in view of SERVQUAL model by examining five service
dimensions namely: tangibles, reliability, responsiveness, assurance, empathy and
convenience. Structural equation model (SEM) was used in estimating the effects of the
satisfaction of customers for electricity service among the variables studied. The findings
of the study indicated that, the overall analysis of resident customers satisfaction based on
the above variables indicated that there is a big gap between perceived and actual services
delivered. Customers’ preference for electricity service was explored using choice
experiments and a mixed logit model to quantitatively analyzes customers' preferences and
their marginal willingness to pay for improved residential electricity services. The study
provides an ex ante evaluation of customers' acceptance of hypothetical electricity
services. According to the results, resident customers consider the electricity bill and the
electricity mix as the two most important attributes when choosing their electricity
services. Resident customers are willing to pay Birr 177 (USD 5.36) more to reduce outage
once in a year
