What Is a Letter of Authority for Energy?

A Letter of Authority Gives Your Energy Broker Legal Permission to Act on Your Behalf. Without One, They Cannot Access Your Account Data or Speak to Suppliers About Your Supply.

If you’ve ever worked with an energy broker, you’ll have been asked to sign a Letter of Authority before any procurement work begins. It is a short document — typically a single page — that authorises the broker to act as your agent in energy-related matters. It is the foundational document of the broker-client relationship in commercial energy procurement, and understanding what it does and doesn’t authorise is important for any business owner entering into a broker arrangement.

What a Letter of Authority Is

A Letter of Authority (LOA) in the business energy context is a written authorisation from the business — the energy customer — to a named energy broker or consultant, granting that broker the right to:

• Obtain consumption data and account information for specified supply points from the current energy supplier
• Approach energy suppliers on the business’s behalf to obtain contract quotations
• Negotiate contract terms with suppliers
• Receive and review contract documentation

In practical terms, the LOA is what allows a broker to call your current supplier, quote your account number, and obtain your annual consumption data — data that the supplier would not release to a third party without explicit customer authorisation. Without a signed LOA, a broker cannot access the market information needed to obtain accurate, personalised quotes for your supply.

What a Letter of Authority Does Not Do

The scope of an LOA is — or should be — limited to information gathering and negotiation. A correctly drafted LOA does not:

• Authorise the broker to enter into a binding contract on your behalf. Signing an LOA does not mean a broker can commit your business to a new energy contract without your explicit approval of the specific terms. Any contract should be separately reviewed and signed by an authorised representative of your business.
• Authorise the broker to make payments or access financial accounts. An energy LOA is specifically scoped to energy procurement activities — it is not a general power of attorney.
• Lock you into working exclusively with that broker. An LOA is a permission document, not an exclusivity agreement. You retain the right to approach other brokers or suppliers directly.

Some broker LOAs include broader language that could be interpreted as granting wider authority — for example, language that includes authority to “manage” your energy account or to “make decisions” on your behalf. Review the LOA carefully before signing and ensure the scope is limited to procurement activities.

The Telnergy LOA: What It Contains

Telnergy’s standard Letter of Authority is a single-page document in plain format. It contains:

• Your company name, registered address, and Companies Registration Number
• Your contact number
• Seven authority paragraphs clearly stating what Telnergy is authorised to do on your behalf — primarily obtaining account information and approaching suppliers for quotations
• Terms of engagement
• Signature block with name, date, and position
• Your UPRN (Unique Property Reference Number) where applicable

The LOA is presented to suppliers when we request account information or submit quotation requests. It is the document that unlocks your consumption data from your current supplier and allows us to begin the market comparison process.

How Long an LOA Remains Valid

The validity period of an LOA is typically defined within the document itself — commonly 12 months from the date of signature. After expiry, the broker cannot use the LOA to access account information or represent the business to suppliers without a renewed authorisation.

Some brokers use LOAs without defined expiry periods. An open-ended LOA that doesn’t expire should be treated with caution — it allows the broker to represent your business to suppliers for an indefinite period, potentially including periods when the relationship is no longer active.

For multi-year client relationships, Telnergy requests renewal of the LOA annually to ensure the document remains current and reflects any changes in authorised signatories or business structure.

The LOA and Broker Commission

The existence of an LOA does not, by itself, entitle a broker to commission on contracts arranged during the validity period. Commission arises from the contract arrangement — a broker earns commission when a contract is agreed and executed through their introduction.

However, some broker LOAs include language suggesting the broker is entitled to commission on any contract entered into during the LOA period, regardless of whether the broker arranged it. This language is inappropriate and should be challenged. An LOA is an authorisation document; it is not a fee agreement. Commission entitlement should be covered in a separate engagement letter or in the broker’s terms of business, not in the LOA itself.

Can You Revoke an LOA?

Yes. An LOA is a permission document and can be withdrawn at any time by written notice to the broker. If you wish to terminate a broker relationship during the LOA validity period, written notice of revocation — sent to the broker and ideally also to any suppliers who have been provided with the LOA — is the appropriate mechanism.

Following revocation, the broker no longer has authority to represent you to suppliers or access your account information. Any contract arrangements in progress at the point of revocation should be clarified — contracts already agreed and signed remain valid; negotiations in progress should be halted.

What to Check Before Signing an LOA

• Is the scope limited to energy procurement activities?
• Does it specify a validity period?
• Does it name the specific broker firm (not a group or parent company whose scope is unclear)?
• Does it avoid language suggesting authority to enter into binding contracts on your behalf?
• Is there any commission language that should not be in an LOA?

A straightforward, properly scoped LOA takes five minutes to review. It is worth taking those five minutes before signing.

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Telnergy Limited • Independent Energy Consultants since 2002 • Ofgem TPI Registered • Christchurch, Dorset