Prepare your Microsoft 365 Tenant for Email Sending from Cargas Energy

Jonathan Bowman

Edited: June 08, 2026 14:41

Summary:

Microsoft is making changes to Microsoft 365 authentication, and the current username/password method will no longer work. This requires a new authentication method called OAuth2. Cargas has implemented a new email sending mechanism that adapts to this change.

If you use Microsoft 365 to send emails such as invoices and statements to your customers from Cargas Energy, you will need to take immediate action so that emails will continue arriving in your customers’ inboxes after March 2026.

Your Microsoft 365 admin must perform crucial configurations in Microsoft Entra ID (formerly Azure AD) and Microsoft 365, in order to use the new OAuth2

This is Step Two of the Two Part process:

Overview Guide: Microsoft 365 and Outgoing Email from Cargas Energy
1. Configure Microsoft 365 Email Sending in Cargas Energy (Previous Step)
2. Prepare your Microsoft 365 Tenant for Email Sending from Cargas Energy (You Are Here)

Process:

To setup your Microsoft Entra and Microsoft 365 tenant for outgoing email from Cargas Energy, the following steps are needed:

Identify your Microsoft 365 Administrator
Create a New App Registration in Microsoft Entra
Configure permissions
Upload the certificate
Enable SMTP Authentication in Microsoft 365
Create Service Principal and Allow Email Sending

1. Identify your Microsoft 365 Administrator

Microsoft Entra (formerly Azure Active Directory) is the identity system that manages access to your Microsoft 365 services. Even if you haven’t directly worked with it before, if your organization uses Microsoft 365 (Outlook, Teams, etc.), you already have an Entra tenant. This guide will walk you through creating an app registration with the necessary permissions to allow Cargas Energy to continue to send emails through your Microsoft account.

Requirements to Begin:

Identify your Microsoft 365 administrator.
Ensure they can log in at admin.microsoft.com and also have access to entra.microsoft.com and can see the “Applications” option in the sidebar there. If they don’t have admin access, you’ll need to contact your IT department or the person who manages your Microsoft 365 subscription. If you purchased Microsoft 365 through a partner or reseller, ask them to help identify the appropriate administrator or temporarily grant you the necessary permissions to complete this process.

2. Create a New App Registration in Microsoft Entra

Once logged into entra.microsoft.com, go to the sidebar at the left and:

Select “Applications” in the sidebar
Select “App registrations” in the sidebar (below Applications)
Select “+ New registration” just under the “App registrations” heading in the main page

registration screen

Now enter a name for this application. We recommend “Cargas Energy Outgoing Mail” so that it is abundantly clear what this is for.
We recommend leaving “Accounts in this organizational directory only… single tenant” checked for security. You will not need a Redirect URI; leave that part blank.

new registration

3. Configure permissions

The correct permissions must be enabled in order to send email through your Microsoft 365 tenant:

You will see a new page for your application with its own sidebar.
Select “API Permissions” in that side bar, in the “Manage” section
Select “+ Add a permission” in the “Configured permissions” section on the main page

permissions screen

Select the “APIs my organization uses” tab
Search for “Office”
Select “Office 365 Exchange Online”

Office 365 selection

Select “Application permissions”

select application permissions

Scroll down until you see “SMTP” and expand it
Select “SMTP.SendAsApp”
Select the “Add permissions” button to save

select SMTP.SendAsApp

Select “Grant admin consent for…” to enable this new permission

permissions status

Pay Attention to the Status column for any "Not granted for..." message, you can resolve it by clicking "Grant admin consent for..." again.

4. Upload the certificate

Select “Certificates & Secrets” in the app side bar, in the “Manage” section
Select the “Certificates” tab
Select “Upload certificate”

certificates

Select the public certificate (the .cer file) you downloaded during the Cargas Energy mail setup guide.
Enter a description such as “Cargas Energy Mail”
Select “Add” button

upload certificate

5. Enable SMTP Authentication in Microsoft 365

Go to admin.microsoft.com
Select “Users” in the left side bar, then “Active users”
Select the user you intend to send email as.

active users

Select the “Email” tab
Select “Manage email apps”

manage mail apps

Now make sure that “Authenticated SMTP” is checked
Select “Save changes” button

enable authenticated SMTP

6. Create Service Principal and Allow Email Sending

For the final step of configuration, we must use Powershell.

Launch Powershell by opening your Start Menu in Windows, immediately start typing the word “Powershell” and then select run as administrator

Application and Object ID

Unless you have already installed the ExchangeOnlineManagement module, you will need to install it using the following command (it will take several seconds to download and install):

Install-Module -Name ExchangeOnlineManagement

Note: if you are unable to enter Powershell commands due to restrictive execution policies on your machine, you can temporarily relax those restrictions with the following command. Once you close your Powershell window, the restrictions will again resume, so you may need to enter this again at the next step when you launch a new window.

Set-ExecutionPolicy -ExecutionPolicy RemoteSigned -Scope Process

Now you can close that window and launch an ordinary powershell window by going the start menu again but this time just left-click normally, no need to launch as administror. Then import that module (if all goes well, nothing will seem to happen)

Import-Module ExchangeOnlineManagement

In the following steps, we are going to assign some variables that will be used by later commands. Take your time, and if you get one wrong, that is no problem at all; just re-enter the corrected variable assignment on a new line.

Find your Microsoft Tenant ID and copy it. Your Tenant ID can be found in Microsoft Entra by going to Identity > Overview:

Tenant ID

Copy and paste the following into the Powershell window, but before hitting enter, change the part that is within quotes to your Microsoft tenant ID that you just copied:

$tenantID = "Your tenant ID here"

Find your Application ID and Object ID by going to Identity > Enterprise applications then selecting the app registration you created earlier (note also that the Application ID is the “Client ID” someone will also need to paste into Cargas Energy):