Identified a $42,000 overbilling for a client in Albuquerque with PNM. Filed the claim 4 months ago and PNM acknowledged the error but says the refund is still being processed. My client is happy with the finding but keeps asking when I'm getting paid since the refund hasn't arrived yet. My engagement says my fee is due when the recovery is received. At what point does the delay become a problem and what can I do about it?
How to handle contingency fees when the utility drags their feet on the refund
Four months isn't unusual for a large refund. Utilities have internal approval processes for refunds over certain thresholds — at PSO in Oklahoma anything over $10,000 requires management sign-off which adds weeks. I'd suggest calling PNM's commercial billing supervisor (not just customer service) and asking for a specific timeline. Get it in writing via email. If they say 60 more days, follow up at 45 days. Be persistent but professional. Utilities don't ignore refund requests but they don't rush them either.
James, your engagement agreement should have a clause that addresses utility processing delays. Mine says: if the utility acknowledges the overbilling but the refund is delayed beyond 90 days, the client agrees to make good faith efforts to expedite the refund and the auditor's fee becomes due within 30 days of the refund being received. This protects you from indefinite delays. For the current situation, Ed's advice about contacting the billing supervisor is the right next step. Document every interaction.
PNM finally issued the refund at the 5-month mark — full $42,000 as a bill credit spread over 3 months. Client paid my contingency fee promptly once the credits started appearing. Adding Randy's delay clause to my engagement template going forward. Lesson learned.