Customer perceived value of electricity in the province of New Brunswick in Canada: A sustainable development approach

摘要

Since 1881, when the first electric utilities were formed, their business model has been barely altered. However, recently liberalization of energy markets, technological innovations, adaptation of renewable energy resources and an increasing environmental awareness have dramatically transformed electricity markets. As a result, the role of customers’ preferences increased significantly. To address these problems, this study attempts to revise the existing business model for electric utilities by introducing the concept of customer perceived value (CPV). CPV is then used to quantify the value of products and services in electricity markets from perspective of a supplier to better incorporate customers’ needs in the development of new electricity products and services. Two major research tasks were undertaken in the study in this regard: (i) development of interdisciplinary conceptual framework for CPV, and (ii) identification and evaluation of fundamental determinants of CPV for electricity products and services. Addressing the first task, discussions around CPV across various academic disciplines were reviewed. The review served as basis to construct a clear, structured and systematic definition of CPV for both general market products and services as well as industry-specific products and services for electric utilities. The second task was addressed on basis of the sustainable development philosophy and hedonic price approach. Eventually the latter was used to evaluate the impacts of key determinants on CPV of electricity products in the province of New Brunswick in Canada. Rigorous statistical work was performed regarding the following two assessment groups: (i) urban versus rural customers, and (ii) residential versus industrial customers. Our findings show the need for a more comprehensive, multidimensional and customer-centric approach and specifically that economic determinants, particularly average electricity price and household income, were the most crucial determinants of CPV for electricity followed by social, environmental and technological factors. However, the ranking of determinants varies between customer segments. Based on these results, it was suggested that electric utilities in the province should incorporate some specific factors into their design of new electricity products and services for different consumer groups to provide higher CPV and consequently enhance business performance.