Turning Utility Experts Into Top Rate Witnesses
Recently, a large southern electric utility needed a rate hike. Going into the hearing, its expert witnesses were completely confident of success. Why not? They were respected in their fields; they knew their facts, and the rate request was reasonable. It was certain that the commission would grant an increase. But that is not the way it turned out. Instead, the utility came away from the hearing millions of dollars poorer. What went wrong?
The utility’s best witness sabotaged the effort. He had gathered all his facts, and he knew his job, but his attitude on the stand destroyed his testimony. The utility commission discounted it, and characterized him as a truculent, unhelpful witness.
How can a utility avoid such disasters? With the proper training, “Utilities give their witnesses virtually no preparation, except what their lawyers can provide them,” says Ronald C. Gossling, president of the Communication Counsel of America (CCA), Dallas, Tex. “Preparation by utility lawyers is a help,” he says, “but it often leaves out a key element: How the utility can project credibility at a hearing. The witness must appear helpful, and he also must build a defensible transcript, because every word spoken becomes a matter of record. Lawyers for the intervenor are paid to tear that testimony apart, to discredit the utility’s witnesses, to show that the request for a rate increase is based upon an unfounded premise.”
It seems reasonable that all a utility would need to do to obtain a rate increase is show that its costs of doing business have increased; therefore, it must increase its rates to produce revenue, because if it does not, the quality of service will suffer. But proving that is not always as simple as it might seem.
Part of the difficulty is that an intervenor in the rate hearing may be a company or a group of people who feel strongly that a rate increase is not warranted, no matter what the reasonable circumstance. Frequently, intervenors hire lawyers to challenge the utility’s case. When that happens, the utility’s expert witness is faced with cross-examination by a lawyer representing an opposing view. Under cross-examination the witness may be made to feel that his integrity is being attacked.
That’s where many witnesses fail, says Gossling. They take the cross-examination personally, becoming either angry or discouraged – as the intervenor’s lawyer intends – and do not perform well at all. “Most witnesses feel that their own personal code of ethics is being attacked under cross-examination. They become defensive because they believe in what they are doing. Some may go through an entire day, or many hours of the day, testifying and feeling as if they are being mugged. And they are totally defenseless, because anything they might do to defend themselves can only get them into a worse situation.
“Under intense cross-examination by a skillful lawyer,” he continues, “one witness at first began to fondle the binder containing his testimony, then he brought it to his chest, and finally he proceeded to answer with his chin on the table, holding his testimony as if to say, ‘You are attacking everything that’s precious and valuable to me. Please stop.’ That witness lost credibility.
“If the intervenor’s lawyer is good,” explains Gossling, “he will make the witness feel that he has been led into a room in which, one by one, the windows and doors have been boarded up and there is no escape.” This is where training helps.
Addressing sensitive issues
“Cases often break down when utility witnesses are not prepared to honestly address the most sensitive issues – the most vulnerable points,” reveals Gossling. “‘Isn’t it true,’ the lawyer may ask ‘that there was damage to the powerplant three years ago, and that nothing has been done so far to repair it?’ The witness sits there knowing full well the utility hasn’t done a thing. How can a witness handle that, and still retain his integrity? For in order to be credible to the commission and the public, the witness must be both honest and knowledgeable. Besides,” he says, “I want the utility’s witnesses to have clear consciences so they can sleep at night,” and be rested and ready for the next day.
Some witnesses hedge to protect the company, and later on they regret not being honest. “We tell witnesses when we first start to train them that our operating philosophy is to tell the truth even when it hurts, then put the truth into a clear perspective,” Gossling explains. Most witnesses want to defend themselves and build a fortress to protect sensitive company issues before they reveal the answer to an opposing lawyer’s questions. “That is the quickest way to lose your credibility,” he says. Rather, he continues, the problem should be put up front and evidence built around it to support his answers. Unfortunately, he adds, the bent of the engineering mind “does not always allow it to put problem-plus-answers up front. It usually prefers building a case and enlightening the lawyer before providing an answer that will educate the lawyer for the opposition – obviously not a smart move when dealing with a professional.” Gossling comments.
In training witnesses, Gossling provides a Straight Question Model, one of the techniques used in training witnesses that he and the late Stephen A. Rowan, a former CBS news correspondent, developed. The direct answer – the honest answer – goes up front, no matter how risky. To illustrate, the utility’s financial expert might face the question: “Hasn’t the cost of money decreased in the last 12-month period? Why, then, do you need a rate increase?” The answer to that could be: “Yes, the cost of money – both interest on borrowings and yields on bonds – has decreased, lowering that cost for our utility.” If the witness stops there, obviously he has just made a case for the intervenor. So, he must quickly reposition the issue, that is put the truth into a clear perspective .
The correct repositioning statement by the utility witness should, after the question concerning utility borrowings and bonds, include phrases such as: “And other costs have climbed substantially.” Note the conjunction, “and“. Why shouldn’t the witness have said: “But other costs have climbed substantially“? But seems to be more accurate. A key point that Gossling teaches witnesses is to “scratch their buts.” Why? “For any smart lawyer,” he comments, “‘but’ is a signal for a contradiction by the witness, in which he is going to try to shoot down the opposing lawyer’s premise.”
The utility witnesses should use “and” instead, because this conjunction gives no indication that a contradiction is coming. The lawyer is in the dark. He has no idea what lies ahead. When the witness continues his reply after using “and,“ he can take a totally different direction – the one in which the witness wants to go, not the one in which the opposing lawyer wants him to go.
‘Before I answer…’
“Yes, if” is another phrase that protects the direct answer of the witness from the interruptions of the intervenors’ lawyers – something witnesses worry about. It does this by acting as a signal to the utility’s lawyer to point out that the utility’s witness may have been about to qualify his answer and that the statement should be completed. Other replies Gossling says are useful in preparing for interruptions are, “Yes, counsel, with qualifications.“ Or, “I’ll give you a qualified yes for that.“ Another is, “Yes, for three reasons.” And if the witness loses the opportunity to qualify an answer, he can start answering the next question with, “Before I answer your next question, my previous answer is incomplete as it stands; for example…” Now the witness can provide the evidence to back up his answers.
Because witnesses tend to forget to include the evidence part of their answer, Gossling teaches an easy-to-remember acronym for the types of evidence a witness can use. The acronym is FEAR – Fact, Example, Analogy, or Reference. (A reference is a quotation from a respected organization.) The witness-trainee is taught to instinctively use the most powerful piece of evidence available. “But he can do this only after he has been drilled on giving evidence for three days solid,” says Gossling.
Even after the questions have been answered and repositioned and the evidence provided, the job is still not done. “What commissions often miss,” says Gossling, “is that in asking for an increase the utility is taking a position to benefit the people it serves. The reason the regulators miss this is that expert witnesses are often hesitant to reveal it. So, we encourage them to include this ’customer benefit’ information in their answers.”
The witness’s benefit statement might sound like this: “In part, we’re asking for this increase to improve our system so that we can continue to provide our customers the same quality of service. Without it, we feel that the quality of service will suffer.”
Witness-trainees are taught to finish with an ‘SPS’ – a short, positive summary.“ It may sound like this: “So, we’re going to be hit with higher interest rates in the future, and we want to make a move now to prepare for that on behalf of our customers.” Part of the reason for an SPS, according to Gossling, is that it’s always best for a utility if the last sentence spoken by a witness, before the next line of questioning by opposing lawyers, is a positive statement.
Another CCA training device, the Straight Question Model, is one that is presented first at CCA’s training seminars. Participants work hard with it for three days. “Each witness spends about 70% of his or her time performing on camera. Then we use videotape to practice the skills we teach during the other 30% of the time. We also use the utility’s own lawyers, who have helped prepare the case, to cross-examine their own witnesses on camera. The lawyers role–play the intervenors. They know the case better than anybody, and they are tougher than the outside world.”
A behavioral change?
“What we are looking for is a behavioral change, and three days is the minimum it takes for that, plus a one-day refresher just before the rate case.” Why a behavioral change? One reason is that the expert witness is highly specialized in his own discipline or expertise and tends to use the special language or jargon of his field. So, he must learn to convert his technical language and concepts to “street language,” to phrases that create clear pictures for board members’ minds.
Part of the challenge is not only teaching the expert witness to explain murky terms to laymen (terms like econometric model), but also to make the explanation graphic and powerful, so that a board member will never forget what an econometric model is.
Technical jargon isn’t the only thing that gets in the way of understanding. “Engineering arrogance can, too,” says Gossling. A hearing is the wrong place to have that affliction, he says, “because board members and hearing examiners have egos, too.” Part of the objective is to be 100% helpful to board members. “If that is the objective,” says Gossling, “and the expert believes in what he is saying, chances are the board members will understand it. But if the objective is to look good to the utility’s management, or to hide its mistakes, chances are the expert will explain key issues in a condescending manner, using unintelligible language. And whether or not the board member understands is no longer the point. He doesn’t want to. Arrogance and technical jargon are two areas that must be converted to helpful attitudes, understandable specifics, clear pictures, and street language.”
Because they are billed as experts, most witnesses feel they must understand everything they are asked. “They’ll go ten miles down the road in the wrong direction, because they believe they must understand a lawyer’s question, and are afraid they’ll look dumb if they don’t. They also think they are not permitted to ask questions. To look smart and respond to a question that you don’t totally understand is analogous to breaking into jail,” says Gossling.
“One of the reasons we call it the Straight Question Model is that you have to have a straight question to make the model operate and it has to be question you understand.” A witness, Gossling continues, has every right to understand the question before he can be expected to answer it.
CCA trainees are also taught the “Clarifying Model,” which helps them to understand how and when to use open-ended questions. The dialogue in such a witness-lawyer exchange might go like this:
Intervenor: Why charge us for something that is not producing electricity?
Witness: What charge are you referring to?
Intervenor: The future powerplant that you want to charge us for.
Witness: Which plant is that?
Intervenor: Squirrel Haven
Witness: That site is recorded as “plant held for future use.” If I understand your question, you want to know why customers are charged for a plant site that the company is holding for a future powerplant. Is that correct?
Intervenor: Yes, it is.
Now the witness can answer, using the straight question model. Normally, a witness only gets away with one or two of these clarifying questions before the lawyer says, “I’ll ask the questions,” so it’s important to limit that tactic, or stand the chance of being classified as argumentative. The approach that works best is, “Please give me an example of what you’re asking.”
What works worst is to guess at what the opposing lawyer means. For example, the witness might ask, “Are you asking me if other experts disagree with me?”
Questions like that are also analogous to breaking into jail, because they supply the opposing lawyer with new lines of questioning to follow. The question is better phrased: “When you say there is considerable disagreement over my predictions of growth rate for our service territory, who are you thinking of that disagrees?”
Incidentally, to protect the witness from the fight-or-flight effects of cross-examinations, Gossling teaches a “compose sequence.“ This is a short series of steps that allows the participant to regain his emotional composure in 10 seconds or less. “The body, in a sense, has a memory,” he says, “and its posture tells the brain whether we are feeling good or bad.” When a witness is being badgered, he develops a fight-or-flight stance: His hands start to tighten, knuckles whiten, shoulders droop, and the head sags. His breathing becomes shallow, and his heart rate increases. At this point, his brain functions start to jam, and sometimes the thinking machine even goes blank.
CCA’s Victor E. Downing has developed a sequence that sounds like the preliminaries to a space shot: Step one: Lean back slightly from the confrontation. Step two: Reverse the defensive posture, so that the shoulders go back, the spine is straight. Step three: Take a deep breath. Step four: Do something physically comforting. Rub the back of your neck, etc. Step five: Accept feelings of confidence. Step six: Return to the confrontation zone by moving slightly forward, signaling the mind and body that it is safe to reengage.
“Defusing” is another technique for dealing with emotionally charged issues. “We teach them to deal with four types of questions: inflammatory, partly true, contradictory, and false and damaging,” says Gossling. Defusing is similar to a situation where “a bomb is tossed in your direction and it’s lit. You don’t have time to bring in the bomb squad, defuse and disassemble it, or explode it in a protective device. You only have time to yank the fuse.”
The lawyer may say, for example, “The state utility commission has questioned your rate proposals in the past, consumer associations throughout this state have criticized you for raising rates, and industrial associations have attacked you on every side. Don’t you think it’s time to hold the line on rates?” This is clearly inflammatory. There may be some truth in it, but it carries such emotional words as attacked, criticized, questioned.
The defusing technique for responding is simply to restate, or paraphrase, the question in less emotional words, like this: “Counselor, I believe you’re asking if the customers are getting the proper quality of service for a fair price, and can we justify it. The answer to both questions is yes.” The question was restated, and then answered. To do this, the restatement must contain the key elements that the opposing lawyer had in his; otherwise, it is reduced to manipulation, which is not ethically pure.
The part–true question might sound like this: “Isn’t it possible that an unwarranted expenditure by your company could be overlooked, and that would cost your customers more money?“ The key is, “Isn’t it possible.” That part is true. It is possible; no one is perfect. The “give-to-get” technique is used. This is an “it’s true… and it’s also true…” type of reply, which might work this way: “Yes, it’s true that an unwarranted expenditure could slip through, and if it really happened, it could cost our customers money. It’s also true that we have a system of checks and balances. For example…”
When the reverse of the opposing lawyer’s statement is true, a reverse statement is made: “Just the opposite is true.” And when the statement is false and damaging, the reply takes the form of a flat denial: “That is absolutely false.”
The ideal witness
Gossling describes the ideal witness as “well-founded technically in his area of expert testimony, secure in his opinions, with a strong code of ethics. That is, there is nothing he would rather do on the witness stand than fully tell the truth and he is willing to go the extra mile to put the truth in a clear perspective for the hearing examiner. He is so secure that he is willing to share power with the lawyer. The witness who is willing to cooperate on many questions, and then come down with both feet to resist at the appropriate point, is secure enough to share power.”
Most witnesses feel that succeeding well in a hearing and under cross-examination is a matter of doing their homework. The rest is left to chance, and is often called an art. They say that you either have it or you don’t.
“We have a refinement on that point of view,” comments Gossling. “We believe that being a good witness is 50% homework, 40% science, and 10% art. It is the science of effective communication in high-pressure situations that most witnesses lack. Most of us are good at telling the truth, but few of us are good at putting the truth into a clear picture that anyone can understand, and fewer still can do that under pressure. We provide witnesses with the science of communication as well as plenty of opportunity to practice it on videotape with communication models that are step-by-step structures – like following a wiring diagram for circuits. If they can follow the models, they succeed.”
This article originally appeared in Electrical World.
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