I've been offered a consulting contract with CenterPoint Energy to help them update their commercial rate structures. Good money, but I'm concerned about conflicts with my existing audit practice. Several of my current clients are CenterPoint customers. Would taking this consulting gig create ethical issues for future audits? The CUBA guidelines aren't entirely clear on this scenario.
Conflict of interest question - utility consulting work
Carol, I'd be very careful here. Even if there's no direct conflict, the appearance of impropriety could hurt your credibility with clients. If you helped design the rates you're later auditing, customers might question whether you're being objective. I turned down a similar opportunity with MidAmerican Energy for exactly this reason.
Dana raises good points. I actually called CUBA about a similar situation with Avista last year. They said as long as you disclose the relationship and recuse yourself from auditing any rates you helped develop, it could be okay. But you'd need to be very transparent with existing and future clients about your utility work. Documentation is key.
I agree with Ernest about disclosure being critical. We've seen similar situations here in Memphis with MLGW consultants. My recommendation would be to either focus on utility consulting OR audit work, but not both with the same utility. The potential for conflicts is just too high, and clients will always question your objectivity. Sometimes the safest path is the best path for long-term business.