A Letter Of Authority: Don’t Miss These 6 Details

by Tanya April 11, 2022

If you ever wanted to change your business electricity or gas provider, you might have come across the term ‘Letter of Authority’.

Like a majority of people, you might be unsure what they are, let alone what to do when you get them.

We put together a quick guide to answer some of the most common questions about ‘Letter of Authority’ in energy sector.

What is a Letter of Authority (LOA)?

A Letter of Authority (LOA) is a legal document that authorises a third party or agents to correspond with energy suppliers on behalf of you or your business.

A properly constructed letter of authority will list the specific tasks and responsibilities the third party has been authorised to deal with for ‘the principal’.

While having an efficient and dependable energy supply is critical to the functioning of your company, many business owners lack the time necessary to make an energy comparison or manage their accounts.

That is why many people entrust their energy contracts to a broker or consulting company like Utility Bidder. They can assist businesses in comparing and switching energy and negotiating with suppliers.

NB! Before a 3rd party consultant can help you, your company must first grant them a Letter of Authority.

The importance of a Letter of Authority

Energy brokers or consultants function as intermediaries for a client and energy corporations.

However, since their names do not appear on your account, the energy company (mainly your current utility management company) wants authorization from the business account holder to enable the consultant or broker to speak on their behalf.

Because business owners lack the time or ability to manage their accounts, brokers can communicate with the energy provider on their behalf to acquire relevant information that enables them to receive accurate quotations.

Simply stated, a Letter of Authority (LOA) enables them to ‘act on their behalf, with their authorization,’ when contacting their present energy provider.

Why are Letters of Agreement (LOAs) used to change corporate energy suppliers?

Many company owners find it difficult to switch energy suppliers, this is where business energy brokers come in. 

A letter of authority empowers your broker to act on your behalf and precisely spell out what they can and cannot do for you.

A letter of authorization can be used to get documented account information from your present energy provider, which may be required to move suppliers. 

The majority of new supply deals, including energy consultants, will need a letter of agreement.

There are two different sorts of LOAs:

  • Level 1: This is often used to obtain information about your energy providers, such as your current energy usage statistics, current contract, and any needed meter readings.
  • Level 2: This enables third parties to access almost all your energy supply data. Additionally, it allows them to inquire entirely on your behalf.

Most energy brokers will need a level 1 letter of authorization since this is often required to transfer providers and evaluate a variety of business power offers. 

Always verify the degree of assurance your business energy broker requires and if you trust a third party enough to provide them with a level 2 LOA.

Important details needed on an LOA

Although writing an LOA may seem daunting at first, it does not have to be.

You must provide the following crucial pieces of information on the Letter Of Authority:

  • Always include your full business name, address, postcode, and contact details, as well as the contact information for the third party for whom you’re creating the LOA.
  • Additional background checks may be required to validate your company before a third party proceeds.
  • Add an official corporate letterhead to demonstrate that the document is authorised.
  • Make sure your LOA gives detailed guidance on what a third party may do on your behalf.
  • This should include further information about your connection with the third party, the length of the LOA, and the amount of the LOA you are giving.
  • Make numerous copies of your letter, so you have a backup LOA if something goes wrong later.


The most crucial thing to remember is that the information provided in the LOA should always be precise and straightforward.

Because an LOA is considered a legal document, all permissions must be fully defined.

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