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Letter of Authority (LOA)

Time is a valuable commodity in this day and age, especially for business owners. Growing a business is an all-consuming undertaking, and shrewd delegation is a worthy tool in any leader’s arsenal.

Empowering a third-party energy broker to handle your business energy switch can save you time, money, and hassle. But there’s one thing they require from you before they can get started – a Letter of Authority.

Lauren Smith
Mike Rowe
Written by Lauren Smith
Edited by Mike Rowe
23 November 2025
5 mins read

What is a Letter of Authority?

A Letter of Authority (LOA) is a legal document that authorizes a third party – typically an energy broker – to liaise with energy suppliers on behalf of a business.

This formal authorisation empowers the broker to negotiate with energy suppliers, analyse tariffs, and handle administrative tasks related to energy procurement on behalf of the client, also known as ‘the principal’.

An LOA will be concisely worded and detail the exact tasks and responsibilities the energy broker has been authorised to handle for the principal and will include a signature, date of signature, and an exact timeframe signifying how long authority has been granted for.

By entrusting the broker with the authority to act on their behalf, businesses can save time and resources while benefiting from the broker's industry insights and market knowledge – thus, in theory, giving them access to the energy deals that best suit their business.

This is why so many businesses elect to use third-party intermediaries to secure their business energy contracts.

Alongside switching energy providers, Letters of Authorities can empower third parties to:

  • Switch your broadband service.

  • Switch your home or business insurance policy.

  • Transfer your current account.

What does a Letter of Authority allow energy brokers to do?

A valid Letter of Authority usually empowers a third party to do the following things on your business’ behalf:

  • Energy maintenance

    Handle all energy-related maintenance and administration with your supplier, such as boiler services, smart meter installation and participation in energy schemes such as the Smart Export Guarantee (SEG).

  • Request historical information

    An LOA allows your energy broker full access to all your energy information from your provider - past and present.

  • Deal with your current supplier

    Energy brokers will deal with any billing queries, services and appointments on your behalf, meaning you will not need to speak with your energy supplier directly.

  • Submit meter readings

    Keep track of your business’s energy consumption data and submit meter readings to your supplier.

  • Find you the best deal

    Analyse all available business energy tariffs on the market and recommend cost-effective options for switching.

  • Make a complaint

    If you’re dissatisfied with your level of service, an LOA permits your broker to complain on your behalf. They will also handle all further correspondence.

  • Handle your switching process

    Represent your business throughout the process of renewing or switching energy suppliers, with the goal of securing you a cost-effective deal tailored to your business requirements.

Types of LOA

There are two different types of Letters of Authority. These are:

Level 1

This is the basic authorisation for an energy broker to act on your behalf in regard to energy management and switching supplier. It typically includes authorization for the broker to access the client's energy usage data, communicate with energy suppliers, and make decisions related to energy contracts within predefined parameters.

Level 2

This more advanced LOA provides broader authority to the energy broker or consultant, allowing them to undertake a wider range of activities on behalf of the client. In addition to the functions afforded by a level 1 LOA, a level 2 LOA grants the broker authority to sign contracts, terminate agreements, and essentially wholly on your behalf.

Most energy brokers only require a level 1 LOA, as this enables them to compare all the business energy deals on the market and switch suppliers on your behalf. Ensure you trust your energy broker completely before providing them with a level 2 LOA.

How to write a Letter of Authority

An LOA should be written in clear, concise English. Accuracy and transparency are essential when penning any official document, and this rings true for LOAs.

All LOAs should follow a standard format, have no grammatical errors, and contain in-depth instructions regarding the parties involved.

Even the smallest mistakes or poorly phrased statements can prevent a third party from working on your behalf and can be time-consuming to fix.

Here are some key points to bear in mind when writing letters of authority:

  1. 1

    Be clear and specific when setting out rights and responsibilities for the third party.

  2. 2

    Clearly state what third party you are delegating responsibility to.

  3. 3

    Use professional and formal language throughout.

  4. 4

    Include the duration of the authorisation period. Also, include a break clause.

  5. 5

    Be signed and dated within the last 12 months.

  6. 6

    Provide contact information for both parties involved in the LOA.

  7. 7

    Maintain copies of signed LOAs for your records

  8. 8

    Type the LOA on company letterheaded paper, if possible.

How long is a Letter of Authority valid for?

A Letter of Authority is typically valid for 12 months, but this isn’t always the case. Some LOAs may be ongoing, providing authorisation for the authorised party to act on behalf of the authorising entity until the authorisation is revoked or terminated.

All LOAs should state how long they are valid for on the letter itself, so make sure they do so before you sign one!

When your LOA expires, you will be required to sign another LOA before an energy broker can work on your behalf again.

Who can sign a Letter of Authority?

An LOA is a legal document requiring a signature. If a LOA is on behalf of your company, ensure the business owner or director of the company signs the LOA. Using your company’s letterheaded paper can help save time with background checks.

Can I cancel a Letter of Authority?

Yes, you can. To cancel a letter of authority, you need to issue a fresh letter stating that the previous letter’s authority is no longer valid.

Consult your energy broker as soon as possible if you wish to invalidate the Letter of Authority, giving them the power to act on your behalf. Inform them of your wishes and aim to come to an agreement.

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