Understanding Letters of Authority for Business Energy Brokers

If you have ever switched energy providers using a business energy broker, you may have heard about the need for a “Letter of Authority” (LOA). What exactly is this document and what does it allow your broker to do?

Lots of the businesses that we work with have told us their time would be better spent developing their business rather than dealing with energy comparisons and suppliers. Signing a Letter of Authority means that your broker can handle the hard work for you, saving you time and potentially money.

What is a Letter of Authority?

A Letter of Authority is a legal document used in the relationship between businesses and their energy brokers. It acts as a formal agreement between you, the business owner, and your broker, granting them permission to represent you in communications and negotiations with business energy suppliers.

To clarify, even by signing a LOA, you are not handing over full responsibility to your broker to sign agreements. Any contracts with either new suppliers or your existing supplier will need additional customer sign-off.

Download our Letter of Authority here

Why is a LOA necessary?

Without a LOA, third parties would be unable to carry out these services;

Supplier communication – Energy brokers need a clear authority to engage with your current and potential energy providers. With a LOA in place, they can communicate on your behalf, request the required information like energy consumption data, contract details, and pricing history.
Exploring better deals – Energy brokers utilise the LOA to gather quotes from multiple suppliers, comparing various energy plans to find deals tailored to your business needs. This helps you secure competitive rates, potentially leading to cost savings.
Handling administrative tasks – From initiating the switch to resolving billing queries, the broker, armed with a LOA, can efficiently handle these administrative tasks, saving you time and effort.
Representing your interests – In case of any disputes or complaints, the LOA allows the broker to act on your behalf, taking charge of negotiations.
suppliers to find improved deals
Handle supplier queries – They can correspond and liaise directly with the current energy supplier and deal with any service and/or billing queries on the business owner’s behalf
Arrange appointments – It can allow them to organise energy-related maintenance or upgrade appointments with the energy supplier, such as standard boiler services or smart meter installations
Raise complaints – If there are issues with the current energy supplier, it allows the broker to handle complaints on behalf of the business owner
Energy management – Energy brokers can even submit meter readings or collect energy consumption data collected by the energy supplier for energy management purposes

What does a LOA enable an energy broker to do?

Depending on the wording of the LOA, there are numerous actions it can allow the designated third party to handle. How much or how little they can do on your behalf very much depends on what is in that agreement.

Some of the actions an LOA can enable are as follows;

Request account information – Energy brokers require the current and historical energy account information including consumption history, supply numbers, pricing details and contract end dates
Compare deals and prices – It allows them to request prices from energy suppliers and negotiate with them to find the best energy deals on behalf of the business owner
Negotiate with suppliers – They can start the process of either switching or renewing the energy supplier contracts or negotiate with other energy suppliers to find improved deals
Handle supplier queries – They can correspond and liaise directly with the current energy supplier and deal with any service and/or billing queries on the business owner’s behalf
Arrange appointments – It can allow them to organise energy-related maintenance or upgrade appointments with the energy supplier, such as standard boiler services or smart meter installations
Raise complaints – If there are issues with the current energy supplier, it allows the broker to handle complaints on behalf of the business owner
Energy management – Energy brokers can even submit meter readings or collect energy consumption data collected by the energy supplier for energy management purposes

How to draft a Letter of Authority?

While energy brokers typically provide a standardised LOA (as an example, here is Letter of Authority), it’s essential to understand the key components of the document.

The LOA should cover the following information;

Clear Identification – Include the names, addresses, and contact details of both parties involved – your business and the broker.
Granting Authorisation – Clearly specify that your business is granting the broker the authority to act on your behalf in energy-related matters.
Scope of Authorisation – Outline the specific tasks and responsibilities the broker is authorised to undertake. This may include switching suppliers, requesting information, negotiating contracts, and more.
Duration of Authorisation – State the period for which the LOA is valid. Standard validity is often 12 months, but it may vary, so be sure to check the letter.
Signatory Details – The LOA requires the signature of an authorised representative from your business, such as the owner or a director. Use official letterhead or include the company logo to enhance credibility.

The Importance of Reviewing the LOA

Before signing the Letter of Authority, take the time to read it thoroughly. Ensure that you understand and agree with all the terms and permissions granted to the broker. If there are any clauses that raise concerns or you disagree with, discuss them with the broker to seek clarification or make amendments as necessary.

Exchange Utility’s Letter of Authority

As you now know, a Letter of Authority is a fundamental document in the process of switching business energy suppliers through a business energy broker such as Exchange Utility. By granting this authorisation, you authorise the broker to act on your behalf, streamline the switching process, and potentially secure better energy deals for your business.

You can view and download our own Letter of Authority and if you have any further questions, our team of business energy brokers will be more than happy to help assist you by answering any questions you have and providing you with an overview of how we can help your business to secure a new energy contract.

To get started, either call us on 0800 9777 000 or fill in our energy quote form to see how much you could save…