OG&E is disputing a rate classification finding for my client in Oklahoma City. They're saying my analysis is wrong and the current rate is correct. It looks like this might go to the Oklahoma Corporation Commission for a formal hearing. If I have to prepare testimony and attend a hearing, that's a significant time commitment beyond the normal audit scope. Should expert testimony and regulatory proceedings be included in my contingency or billed separately?
Should I charge extra for expert testimony if the utility disputes my findings?
I bill regulatory proceedings separately. My engagement agreement covers the audit, findings report, and initial claim filing. If the utility disputes and it goes to a formal proceeding, that's a separate scope of work billed at $175/hour for hearing preparation and $250/hour for testimony. The client is getting value from my expertise in a quasi-legal setting — that's different from the original audit work. I've only had to go to a hearing twice in 10 years but both times the hourly billing was worth it.
Steve's approach is standard practice. The audit and the regulatory proceeding are distinct services. Your contingency covers identifying the error and filing the claim. If the utility contests and formal proceedings are required, that additional work should be compensated separately. Include a clause in your engagement agreement that says: if regulatory proceedings are necessary to resolve disputed findings, the auditor will be compensated at an hourly rate of $X for preparation and testimony, payable by the client regardless of outcome.
Added the clause to my agreement. OG&E ultimately settled before the hearing — they agreed to the rate change plus 18 months of retroactive credit. Having the hearing on the calendar with prepared testimony probably motivated them to settle. The preparation work I did was about 12 hours which the client paid for at my hourly rate. Fair outcome all around.