Ownership and operating agreement review for joint owners of generating facility

Organizational need

Our clients encompassed three owners of a jointly owned generating facility. The majority owner also operates other generating units. The owners requested that a review of billings under a joint ownership and operating agreement be done to verify that correct allocations of all associated costs were billed to the owners for operation of the facility. The owners also requested assurance that costs from the majority owner’s other units were not incorrectly allocated to their unit. All three owners have a strong working relationship but view this review as an opportunity to ensure that the contract requirements are being met and that improvements in controls and process can be made where needed.

Baker Tilly solution

Baker Tilly worked closely with all three owners to examine costs, allocations, and processes used to bill for the operating costs of the facility. Our services included first performing a contract risk assessment to determine key areas of review under the contract. This guided us in developing tests of business processes and controls. The review included cost accumulation and overhead allocation areas in order to determine the proper inclusion of costs and thus billing accuracy within the parameters of the agreement. Throughout the review, areas of strength were communicated by Baker Tilly to the owners and recommendations for tighter controls were made to enhance the process and give the owners greater assurance and comfort.


The industry focused Energy and Utilities team at Baker Tilly provided assurance to facility owners that billings for their joint ownership were accurate and identified areas for improvements in controls and allocation of costs. All owners found value in the process and benefited from recommendations for improvements for tighter controls in the billing process.