The group of six councils includes Upper Hunter Shire Council, Lake Macquarie City Council, Maitland City Council, Cessnock City Council and Central Coast Council.

Muswellbrook Mayor Steve Reynolds said following a competitive open tender process in September last year the group secured a long-term electricity agreement with Mojo Power backed by new renewable electricity generation projects.

"The PPA agreement combines participating Councils' electricity requirements of 100GWh for large sites and streetlighting and will increase sources and consumption of renewable energy within the councils' regions," Cr Reynolds said.

Muswellbrook Council said the agreement includes a commitment to construct the NSW-government-approved Upper Hunter Energy Park (UHEP) near Scone.

The council said the planned energy park includes an 80MW wind and 10 MW solar farm with plans for future storage capacity and will also source electricity from two solar farms, one currently operating at Boggabilla and a facility at Yoogali due to commence in July 2022.

The council said the contract structure includes a direct link between the electricity supplied by the linked projects and the electricity consumed by the six councils.

"This will provide a stable price to the projects, enabling a secure financial return over the 10-year contract, as well as long-term cost stability to the councils," the council said.

In addition, the council said each local government area will determine how they manage environmental certificates to support their individual environmental targets over the course of the contract.

"Some of the participating councils will achieve 100% renewable electricity from the outset, while others will progressively ramp up their promotion of renewable electricity in line with their targets," the council said.

Cr Reynolds said the agreement was a great outcome for all of the councils involved.

"(This agreement) will result in stable and lower electricity costs and support the construction of new renewable electricity projects in the region," Cr Reynolds said.

Upper Hunter Shire Council Director Environmental and Community Services Mathew Pringle said combining the council's energy load with neighbouring local government areas to increase purchasing power helped leverage competitive market pricing and made good commercial sense.

"This power purchase agreement ensures Upper Hunter Shire Council remains committed to getting to net zero by 2030," he said.

"The agreement enables us to save money and works towards a more sustainable future."