Verification of billing accuracy for majority owner of electric generating facility

Understanding the need

Our clients included two owners of a jointly owned generating facility. The majority owner is an investor owned utility that manages the ownership and operating agreement for the power generating facility and also owns other like facilities. The owners requested verification that allocations of all associated costs with the facility were appropriated distributed in accordance with the ownership and operating agreement. The review was to also verify that costs from the majority owner’s other facilities were not incorrectly allocated to the unit being reviewed. The 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 reviewed the accuracy of the billing through the review of source data and walk-through of internal controls surrounding cost accumulation, allocation, and categorization. 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 to review, including 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. The team worked in collaboration with the owners to review all documents associated with the facility in order to provide an accurate and all encompassing analysis. After a full review, Baker Tilly provided value added recommendations for improvements in billing structure and processes that benefited both the majority and minority owner.


The Energy and Utilities team at Baker Tilly identified areas where the billings for joint ownership were inaccurate and identified areas for improvements in controls and allocation of costs. Recommendations were made to strengthen the controls around the assignment of ownership categories. The owners received the value added recommendations they were seeking in order to properly allocate operating costs and strengthen business processes.