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About MMA MunEnergy Taking care with electric contracts
When it comes to your electricity supply agreement who signs on the dotted line?
An electricity supply agreement is a legally binding contract. Cities, towns, and schools need to know who is authorized to sign such a contract.
An electricity supply agreement outlines the relationship between a municipality and its electricity supplier. The agreement sets out the rate the municipality will pay, the length of the agreement, and the buildings which fall within its purview.
If a community has an electricity supply agreement already in effect, and an unauthorized individual enters into a new agreement with another supplier, the municipality may be exposed to several significant financial risks. These include: liquidated damages for having those specific accounts taken off the current agreement; legal fees; and a higher price per kilowatt hour than under the original agreement. In most cases, such exposure could likely cost even the smallest town thousands of dollars.
Confusion can arise within a city or town when individual departments – such as school, water, or public works departments – pay the electricity bills for their buildings, but the city or town manages the electricity contracts for the entire community.
Communication is key. A municipality that is under contract must make sure that every department that pays electricity bills knows which departments and organizations are included in the contract. Communities that are looking to contract for electricity must verify, through the municipality’s contract signatory, that the community is not already covered under an agreement with another provider.
Constellation NewEnergy, the endorsed supplier to the MMA’s MunEnergy program, offers assistance to its members in making this determination. For more information, contact MunEnergy Program Manager Emily Neill at (617) 772-7513 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
About MMA MunEnergy Taking care with electric contracts
Taking care with electric contracts
When it comes to your electricity supply agreement who signs on the dotted line?
An electricity supply agreement is a legally binding contract. Cities, towns, and schools need to know who is authorized to sign such a contract.
An electricity supply agreement outlines the relationship between a municipality and its electricity supplier. The agreement sets out the rate the municipality will pay, the length of the agreement, and the buildings which fall within its purview.
If a community has an electricity supply agreement already in effect, and an unauthorized individual enters into a new agreement with another supplier, the municipality may be exposed to several significant financial risks. These include: liquidated damages for having those specific accounts taken off the current agreement; legal fees; and a higher price per kilowatt hour than under the original agreement. In most cases, such exposure could likely cost even the smallest town thousands of dollars.
Confusion can arise within a city or town when individual departments – such as school, water, or public works departments – pay the electricity bills for their buildings, but the city or town manages the electricity contracts for the entire community.
Communication is key. A municipality that is under contract must make sure that every department that pays electricity bills knows which departments and organizations are included in the contract. Communities that are looking to contract for electricity must verify, through the municipality’s contract signatory, that the community is not already covered under an agreement with another provider.
Constellation NewEnergy, the endorsed supplier to the MMA’s MunEnergy program, offers assistance to its members in making this determination. For more information, contact MunEnergy Program Manager Emily Neill at (617) 772-7513 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
Written by MunEnergy Program Manager Emily Neill
