Letter of Authority (LOA) for Business Energy
If you're reviewing your business energy contract, comparing suppliers, or working with a broker, you've probably been asked to sign a Letter of Authority (LOA). For many business owners, this raises an obvious question: what exactly am I agreeing to?
This guide explains what an LOA is, why it's needed, what it does and doesn't allow, and how to make sure you stay in control of your energy account throughout the process.
Compare Now
Get a comparison and start saving today
What Is a Letter of Authority (LOA)?
A Letter of Authority is a formal document that gives a third party — typically an energy broker or consultant — permission to access and act on specific parts of your business energy account with your supplier.
It is not a contract, a supply agreement, or a switch request. Its sole purpose is to authorise a named party to interact with your supplier on your behalf, within limits that you define.
Common users of an LOA include:
- Businesses looking to outsource the time-consuming work of managing energy accounts
- Energy brokers who need supplier data to source competitive quotes
- Consultants and facilities managers handling multi-site energy portfolios
The key distinction to remember: an LOA grants access and permission. A contract commits you to supply terms and payment. Signing one does not automatically mean you've signed the other.
Why Do Energy Suppliers Ask for a Letter of Authority?
Suppliers hold sensitive account data, and they're required to protect it. Without written authorisation from you, they cannot legally discuss your account with anyone else — including a broker acting in your interest.
An LOA unlocks the information a broker needs to do their job properly, such as:
- Meter details, including your MPAN or MPRN
- Usage history, to benchmark consumption and identify savings
- Current tariff information, so like-for-like comparisons can be made
- Contract renewal or end dates, to time any switch correctly and avoid penalties
Without this information, a broker is working blind — meaning slower quotes, less accurate comparisons, and a higher risk of missed renewal windows.
What Can an Energy Broker Do on Your Behalf with an LOA?
Once your LOA is in place, a broker can typically:
- Obtain quotes from multiple suppliers on your behalf
- Compare deals across the market to identify competitive rates
- Discuss contract terms directly with suppliers
- Handle renewals, flagging upcoming end dates before they're missed
- Resolve billing queries or disputes without you needing to be on every call
What they cannot do without additional, explicit authority:
- Sign you into a new contract
- Switch your supplier
- Make any financially binding commitment on your behalf
This is an important safeguard. A standard LOA is about information and representation — not decision-making power. Anything that commits your business financially requires a separate, clearly defined level of authority (see below).
Compare Now
Get a comparison and start saving today
Types of Letter of Authority Explained
Not all LOAs grant the same level of access. Understanding the difference is essential before you sign anything.
Level 1 LOA – Access and Information Only
A Level 1 LOA is the most common and most limited form of authority. It typically permits a broker to:
- View account and meter information
- Access usage and billing history
- Request quotes from suppliers
Limitations: A Level 1 LOA does not allow the broker to negotiate terms, agree to a contract, or make any changes to your account. It is essentially a research and data-access permission.
Typical use case: Businesses that want quotes and market comparisons but intend to review and approve any contract decision themselves.
Level 2 LOA – Negotiation and Contract Authority
A Level 2 LOA extends further, and may permit the broker to:
- Negotiate contract terms directly with suppliers
- In some cases, sign a new contract on your behalf — but only if this is explicitly stated and authorised within the document
Important: Contract-signing authority is never assumed. It must be clearly written into the LOA. If you're not comfortable delegating that decision, a Level 1 LOA paired with your own final sign-off is the safer choice.
What Information Should Your Letter of Authority Include?
A properly completed LOA should contain the following details:
| Field | Purpose |
|---|---|
| Business name | Identifies the account holder |
| Registered address | Confirms business identity |
| Contact person | Names who the supplier can liaise with |
| Supplier name | Specifies which supplier the LOA applies to |
| MPAN / MPRN | Identifies the specific meter(s) covered |
| Account number | Links the LOA to the correct account |
| Signature | Confirms authorisation from an authorised signatory |
| Date | Establishes when authority was granted |
| Expiry period | Defines how long the authority remains valid |
Missing or vague information is one of the most common reasons LOAs are delayed or rejected by suppliers, so accuracy at this stage saves time later.
Is a Letter of Authority Legally Binding?
An LOA is a legally recognised authorisation, but it is not the same as a legally binding supply agreement. Signing one does not commit your business to a contract, a supplier, or a payment obligation.
Key legal points to understand:
- It authorises access and representation, not financial commitment
- It can be limited in scope and time, and revoked at your discretion
- It must comply with UK data protection law (GDPR), since supplier account data is personal and commercially sensitive information
Because an LOA can involve sharing account and usage data, reputable brokers will handle it in line with GDPR principles — using the information only for the purposes you've authorised, and only for as long as necessary.
How Long Does a Letter of Authority Last?
There's no single fixed duration — validity periods vary by supplier and by the terms set out in the document itself.
- Typical validity periods: range from a few months up to 12 months, though this can be shorter or longer depending on what's agreed
- Supplier variations exist: some suppliers set their own maximum validity periods regardless of what's written on the LOA
- Expiry and renewal: once an LOA expires, the broker's access ends automatically.
If ongoing representation is needed, a new LOA must be issued and signed
Always check the expiry date before signing, and calendar it — this is your natural checkpoint to review whether you want the arrangement to continue.
Can You Cancel or Revoke a Letter of Authority?
Yes. An LOA is not permanent, and you are entitled to revoke it at any time, for any reason.
To cancel an LOA:
- Notify the broker in writing that you are withdrawing their authority
- Inform the supplier directly, so they update their records and stop accepting the broker's instructions
- Request written confirmation from both parties that the LOA has been cancelled and access removed
Keeping a written record of cancellation protects you if there's ever a dispute about who was authorised to act on your account at a given time.
Key Benefits of Signing a Letter of Authority
When used correctly, an LOA offers genuine practical advantages:
- Saves time — you're no longer chasing quotes or fielding supplier calls yourself
- Easier supplier comparison — a broker with full account access can compare like-for-like far more accurately
- Better market access — brokers often have visibility of deals and suppliers not easily accessible directly
- Professional support — an experienced broker can flag issues, risks, or opportunities you might miss
- Reduced administrative burden — renewals, billing queries, and paperwork are handled on your behalf
Risks to Watch For and How to Protect Your Business
An LOA is a useful tool, but like any authorisation document, it's worth approaching carefully.
- Choose a reputable broker — check reviews, accreditations, and how transparently they operate
- Read the permissions carefully — know exactly what you're granting before you sign
- Check the expiry date — don't leave an open-ended authorisation running indefinitely
- Understand what you're authorising — particularly the difference between Level 1 and Level 2 access
- Never sign a blank or incomplete document — every field should be filled in before your signature goes on it
A few minutes of diligence at this stage is the easiest way to avoid confusion, or worse, unauthorised action on your account, further down the line.
Common Myths About Letters of Authority, Debunked
"An LOA changes my supplier." — False. An LOA only grants access and representation rights. Your supplier stays the same until you (or your authorised broker, if given that specific power) agree to switch.
"An LOA locks me into a contract." — False. An LOA carries no financial commitment. You remain free to walk away from any deal a broker presents.
"I can't revoke an LOA once it's signed." — False. You can cancel an LOA at any time by notifying the broker and supplier in writing.
"Every LOA allows contract signing." — False. Only a Level 2 LOA with explicit signing authority permits this — and even then, only if you've specifically agreed to delegate that decision.
How to Complete a Letter of Authority: Step-by-Step
- Confirm the broker or consultant is reputable before entering any agreement
- Check which level of authority (Level 1 or Level 2) is being requested, and make sure it matches what you're comfortable granting
- Fill in all required business and account details accurately — business name, address, MPAN/MPRN, account number
- Set or confirm the expiry date — avoid leaving this open-ended
- Read the full document before signing, not just the summary
- Have an authorised signatory sign and date the form
- Keep a copy for your own records
Common mistakes to avoid:
- Leaving fields blank and letting the broker fill them in later
- Not checking whether the LOA grants contract-signing authority
- Forgetting to set or track an expiry date
- Signing without confirming the broker's identity or credentials
Checklist before signing:
- Is the broker's identity and reputation verified?
- Is the correct authority level selected?
- Are all account and meter details correct?
- Is there a clear expiry date?
- Have you read the full terms, not just the headline permissions?
Letter of Authority vs Energy Contract: What's the Difference?
| Feature | Letter of Authority | Energy Contract |
|---|---|---|
| Purpose | Grants access and representation rights | Establishes energy supply terms |
| Legal effect | Authorisation only, not a supply commitment | Legally binding agreement to supply and pay |
| Duration | Typically months, often renewable | Usually 1–5 years, fixed term |
| Permissions | Defined by level (access, negotiation, or signing) | Governs rates, volumes, and service terms |
| Financial commitment | None | Yes — payment obligation for energy supplied |
Frequently Asked Questions About Letters of Authority
Most UK business energy suppliers require an LOA before they'll discuss account details with a third party, though the exact format and requirements can vary supplier to supplier.
Yes. You can issue LOAs to different brokers or consultants, for different sites or accounts, as long as each one is clearly scoped and doesn't create conflicting instructions.
In most cases, yes — many suppliers accept electronically signed LOAs, though it's worth confirming your supplier's specific requirements beforehand.
Yes, once the stated expiry date passes, the authority lapses automatically unless a new LOA is issued.
No. A broker can only switch your supplier if you've granted that specific authority — typically through an explicit, separate agreement or a Level 2 LOA that clearly states this power.
It's not a legal requirement for running your business, but it is generally required if you want a broker to access your account and negotiate on your behalf. If you prefer to manage supplier communications yourself, you can choose not to use one.