Fairfax Media revealed ActewAGL, a premier sponsor of Canberra's centenary celebrations, has lost a major contract to supply the government electricity.

It is understood that the power retailer, which is part-owned by the ACT Government, has been reassessing all its sponsorship arrangements since being snubbed for a $16 million contract, which went to Queensland company ERM Power Retail.

Sources say ActewAGL has sought legal advice on what sponsorship deals it can get out of.

But director of marketing Paul Walshe said that was not the case and all arrangements would stay in place.

“We are very disappointed that we lost that contract. The energy retail business is a pretty tough business and can be quite cut-throat,” he said.

“You win some and you lose some. We have lost comparable and even slightly bigger contracts than this in the past, but this is the first time we have lost the ACT Government contract.

“But this is not going to impact on jobs at all and our sponsorship program will stay in place.”

ActewAGL employs about 750 people and has an annual sponsorship budget of about $1 million.

In addition to that, the local power retailer has committed $1 million from its shareholder dividend for this year’s Canberra Centenary celebrations. The ACT Government is a 50 per cent shareholder of ActewAGL through government-owned utility Actew.

Mr Walshe said all sponsorship would stay in place.

“The centenary is not about the ACT Government, it is about the people of Canberra celebrating a very special event after 100 years. You only turn 100 once,” he said.

“More broadly, the community would be at a disadvantage if we say we are not going to support this or that because we lost a contract.

“We want to win the contract back in two years’ time, but in the meantime, we have just secured some new contracts locally and interstate which helps offset this loss.

“That’s the game we’re in. The ACT Government contract was a good size contract to lose, but life goes on.”

Government sources, however, say the decision to award the power contract interstate was a bad move particularly in light of the fact the Government is part owner of ActewAGL and that the local community pour so much money and goodwill into the community.

“ActewAGL are furious about this and they have a right to be,” one contact said.

“And there are quite a few of us inside government who want answers about why this contract went elsewhere.”