Utilities enter into joint ownership of power facilities as an alternative to sole ownership for a variety of reasons. Economies of scale, the ability to meet peak demand by adding capacity to a utility’s load in smaller increments and maximizing output from a given facility can make joint ownership a sound choice.
In these arrangements, one owner, generally the majority owner, is the facility operator that completes the construction and performs day-to-day operations and maintenance activities. The facility operator bills joint owners for their portion of the costs to run and maintain the facility.
Despite the upside to joint ownership, all members involved must have a clear understanding and agree on each party’s authority, the specific costs to be charged and how the costs will be determined and billed.
For more information on this topic, or to learn how Baker Tilly power and utilities specialists can help, contact our team.