Local governments buy electricity for critical services, and because procurement often involves third-party brokers and competitive suppliers, public-sector staff need to understand a deceptive practice known as “slamming.”
What Is Slamming?
Slamming occurs when an electricity customer is switched to a new supplier without proper authorization or informed consent. It often happens through misleading or incomplete information, such as a “rate check,” “renewal,” or similar language that masks an unauthorized supplier charge.
How Slamming Typically Happens
Slamming does not usually involve forged signatures. Instead, it relies on confusion or lack of clarity. Common tactics include misleading sales language about “locking in a rate” or “updating your account,” unauthorized individuals being asked to sign documents, claims that an agreement allows automatic supplier charges, or quick emails and recorded calls being presented as binding consent.
Why Slamming Is Especially Risky for Local Governments
Slamming is especially risky for local governments because their procurement rules require formal approvals, meaning an unauthorized contract may violate purchasing ordinances or state law. Beyond compliance concerns, public budgets are fixed and transparent, which means unexpected rate increases can disrupt financial planning and require public explanation. Operational complexity adds another layer of risk, as managing multiple departments and meters makes unauthorized changes harder to catch early. Finally, because these entities depend on public confidence, any slamming incident can raise concerns about oversight and accountability, even when the government is the victim.
How to Detect and Prevent Slamming
Local governments staff should watch for red flags such as unfamiliar supplier names on utility bills, rate charges that were not approved through procurement, contracts arriving after service has begun, claims that broker “already has authorization,” or pressure to act quickly to “avoid a default rate.”
To prevent these issues, municipalities can centralize contracting authority, clearly defining who can approve energy agreements. They can further protect themselves by requiring written, reviewed contracts rather than verbal or click-through authorizations, and by regularly auditing utility bills to verify supplier names, rates, and terms. Finally, limiting permissions of the broker through clear written agreements and documenting all procurement decisions also reduces risk.
What to Do If Slamming Occurs
If a local government believes slamming has occurred, it should contact the utility immediately to report the unauthorized switch, request contract documentation from the broker or supplier, and file a complaint with the state public utility commission. Procurement or legal counsel can help evaluate remedies, including potential contract invalidation. In many cases, regulators may require a return to the original supplier and impose penalties on bad actors.
Slamming undermines transparency, accountability, and fiscal responsibility—values that are especially important in local government operations. While competitive energy markets can offer real savings, they also require strong controls and informed oversight.
By understanding how slamming occurs and implementing clear procurement safeguards, local governments can protect public funds, maintain compliance, and ensure energy decisions are made openly and responsibly.
As a MEGA member, you have a team ready to help. Please reach out if you see anything suspicious or have additional questions.
