Electricity Contract Terms to Request: Sample Language

The short answer

The market sets your ¢/kWh on the day you sign; the contract terms are where you have room to negotiate. Ask for wide or no usage bandwidth, a closed pass-through list, explicit capacity treatment, renewal only with your consent, a narrow material-change definition, a market-based termination formula, rights to add and remove sites, reasonable assignment, and clear billing terms. The sample language below is illustrative drafting to start the conversation, not legal advice — have counsel review any contract that matters to your budget.

For the negotiation process and timeline, see the negotiation playbook; for clauses to reject on sight, see red-flag contract clauses; and for definitions of every term, see the contract terms glossary.

The request list at a glance

Term	Ask for	Why it matters
Bandwidth	None, or a wide annual band	Usage changes shouldn't trigger penalties
Pass-throughs	A closed list in an exhibit	Stops costs being added after signing
Capacity	Stated treatment for every delivery year	Capacity is ~$120 per kW of tag per year in 2026/27
Change in law	Limited to new laws, documented, with an exit	Prevents re-pricing for known costs
Renewal	No roll to variable without consent	Rollover prices are where many overpay
Material change	Narrow definition with carve-outs	Protects growth, efficiency and on-site generation
Termination	Market-loss formula, no flat fee	Pays the supplier's actual loss only
Add/delete sites	Defined rights both ways	Portfolios change during a term
Assignment	To a buyer or successor with consent not unreasonably withheld	A property or business sale shouldn't trigger damages
Billing	Dispute window, line-item detail, correction limits	Makes errors fixable

1. Usage bandwidth

Ask for a full-requirements price with no volume tolerance, or a wide band measured annually rather than monthly, with any charge applying only to volume outside the band.

"Customer may consume any quantity of electricity at the Contract Price. No volume tolerance, swing or imbalance charges shall apply."

or

"If Customer's annual usage is below 70% or above 130% of the Contract Quantity, Supplier may charge or credit the difference between the Contract Price and the Market Price only for volumes outside that range, calculated annually."

The percentages are placeholders; negotiate them against your realistic usage range.

2. Pass-through list

Everything not listed should be included in the fixed price.

"The Contract Price includes all energy, capacity, ancillary services, line losses, renewable portfolio compliance and Supplier's costs, except only the items listed in Exhibit B. Supplier may not add items to Exhibit B during the Term except as provided in the Change in Law section."

Ohio-specific point: the state's renewable portfolio requirement is 8.5% for 2026 and ends after 2026. If renewable compliance is priced into the contract, ask that the component stop after December 31, 2026, or confirm it isn't priced beyond then.

3. Capacity treatment

PJM capacity is set through May 2029 ($329.17/MW-day for 2026/27, $333.44 for 2027/28, $325.00 for 2028/29), so there's no reason for vagueness. For a fixed product:

"The Contract Price includes all capacity costs for the Term. Supplier shall not adjust the Contract Price for changes in PJM capacity prices or in Customer's peak load contribution."

For a pass-through product:

"Capacity charges equal Customer's daily peak load contribution as reported by the utility, multiplied by the applicable PJM capacity price for Customer's zone, without markup, shown as a separate line item."

4. Change in law

Limit it to laws or rules that take effect after signing and directly change the supplier's cost of serving you.

"Supplier may pass through only incremental costs resulting from a Change in Law enacted after the Effective Date, with 30 days' written notice and supporting calculations. If the adjustment exceeds [0.25¢/kWh], Customer may terminate without a Termination Payment."

Known items — scheduled capacity prices, filed rate cases — shouldn't qualify.

5. Renewal

For accounts with demand of 25 kW or less, HB 15 requires suppliers to send two notices before a fixed contract rolls to a variable price (90–60 and 45–15 days before expiration) and annual notices to variable-price customers. The notices help, but the contract is what decides the price you roll to.

"This Agreement shall not renew unless Customer executes a new Transaction Confirmation. If Customer remains enrolled after the End Date, Supplier will serve Customer month to month at [defined index-based price], and Customer may switch suppliers at any time without fee."

6. Material change

Define it narrowly, and exclude the things you want to be free to do.

"A Material Change occurs only if Customer's usage changes by more than [30]% from the Contract Quantity for reasons other than weather, energy-efficiency measures, customer-sited generation or storage, or normal business fluctuation."

For mercantile customers (over 700,000 kWh a year), the generation carve-out matters: HB 15 lets them connect their own or third-party generation behind the meter.

7. Termination formula

Pay the supplier's actual loss, not a flat fee or the full remaining contract value.

"Termination Payment equals, for each remaining month, the Contract Quantity multiplied by the positive difference, if any, between the Contract Price and the then-current Market Price for the same period, discounted to present value, plus reasonable documented costs. Supplier shall provide its calculation in writing."

Ask whether any up-front broker compensation is included in the termination amount.

8. Adding and removing sites

"Customer may add accounts at a price quoted by Supplier for the remaining Term. Customer may remove accounts representing up to [10]% of the annual Contract Quantity without charge upon sale, closure or relocation of a facility."

9. Assignment

"Customer may assign this Agreement to a purchaser or successor of the facility, with Supplier's consent not unreasonably withheld, subject to reasonable credit requirements. Supplier may assign only to a PUCO-certified affiliate or successor, with written notice."

10. Billing

"Customer may dispute any invoice within [12] months. Supplier shall itemize all pass-through charges. Supplier shall not rebill for prior periods beyond [12] months."

Confirm whether you'll be on utility consolidated or dual billing, and whether multi-site accounts get a summary invoice. If a deposit is required, ask for its return after 12 months of on-time payments.

FAQ

Will a supplier change its standard contract?

Often, for mid-size and larger accounts. Small accounts priced from a standard matrix have less room, but capacity treatment and renewal terms are still worth asking about.

Do I need a lawyer to review an energy contract?

For multi-year, multi-site or mercantile contracts, counsel review is worth the cost. The sample language here is a starting point, not legal advice.

What is a fair early termination formula?

One based on the supplier's actual loss — the difference between your contract price and the current market price for the remaining volume — rather than a flat fee.

Does HB 15 stop automatic renewals?

No. It requires suppliers to send renewal notices, but the contract still controls what price you roll to, so negotiate the renewal clause.