What is a letter of authority (LoA) for business energy?

If you run a business, sorting your energy contract renewal can be one of those time-consuming tasks you can do without. That’s why many businesses choose to work with a business energy broker or consultant when switching suppliers, negotiating rates, sorting an energy procurement plan, or managing their energy contracts.

But before a broker can do any of that on your behalf, they need you to sign a letter of authority (known as an LoA for short). It’s a simple document, but it carries a lot of weight. Without one, your broker or consultant isn't legally allowed to act on your behalf or access your energy information.

In this guide, we’ll break down exactly what a letter of authority is, why it’s needed, what it covers, and how to make sure you’re using it safely. If you’re a business owner or energy decision-maker, understanding how LoAs work can help you stay in control while making the most of expert help.

In this guide to letters of authority for business energy…

• You'll learn exactly what a letter of authority (LoA) is and why brokers need one before they can act on your behalf
• You'll understand what powers an LoA can grant, from accessing usage data through to negotiating and signing contracts
• You'll find out whether an LoA is a legal requirement and how it fits with UK data protection rules
• You'll get practical steps to protect your business when you sign an LoA, including what to check before you agree
• You'll discover how long an LoA lasts, how to cancel one, and what's changing as broker regulation develops in the UK.

What is a letter of authority?

A letter of authority (LoA) is a written consent document that allows a business to legally appoint a third party, such as an energy broker or consultant, to access its energy account information and act on its behalf when dealing with suppliers.

It gives a third-party permission to act on your behalf in certain areas related to your business energy account. In simple terms, it’s your written authorisation allowing someone else - typically an energy broker, consultant, or procurement specialist - to handle specific tasks that would otherwise need your direct involvement.

The scope of an LoA can vary depending on what you want your broker or consultant to do. Some letters allow the third party to request information, such as your energy usage history or current contract details. Others may authorise them to negotiate contracts, request quotes from suppliers, or even sign new contracts on your behalf.

While the document itself may only be a few paragraphs long, the powers it grants can be significant, which is why it’s so important to fully understand what you’re signing.

A related term you'll often see alongside "letter of authority" is third-party intermediary (TPI). A third-party intermediary is a type of organisation - such as an energy broker, consultant, or price comparison service - that helps businesses arrange, manage, or switch energy contracts on their behalf. Brokers, consultants and comparison platforms are all examples of TPIs operating in the UK energy market.

Why do brokers and consultants need a letter of authority?

In the UK, energy suppliers and distribution network operators are required to protect the privacy and security of customer data. A letter of authority allows brokers to access your energy usage details, contract terms, or billing information.

By signing an LoA, you give your broker the legal right to approach suppliers, access your account information, and handle negotiations on your behalf. Without an LoA, suppliers won’t speak to anyone other than yourself or someone officially named on the account.

An LoA essentially unlocks the door, allowing your broker to do the heavy lifting while you remain the decision-maker. It streamlines the process of comparing quotes, checking contract end dates, avoiding out-of-contract rates, and ensuring your business gets the most competitive deal available.

Using a comparison service like MoneySuperMarket alongside an LoA-based broker relationship means you can compare quotes from multiple UK suppliers while someone else handles the admin and negotiation on your behalf.

What can a letter of authority be used for?

The exact powers granted in a letter of authority depend on its wording. That’s why LoAs often come in different levels or types, based on how much authority you want to give.

Some of the most common permissions an LoA may grant include:

• Accessing your consumption data and usage history
• Requesting contract information and renewal dates from your current supplier
• Obtaining quotes from alternative suppliers
• Negotiating prices and terms for new contracts
• Managing the switching process on your behalf
• Handling billing queries or disputes
• In some cases, signing contracts on your behalf (though this should only be granted with caution)

It’s entirely up to your business to decide how much authority to allow. Many businesses prefer to limit LoAs to information-only access in the early stages of a relationship with a broker, before granting wider powers once trust has been established.

Is a letter of authority a legal requirement?

A letter of authority isn’t legally required by the government. But it is a legal requirement set by suppliers and network operators under data protection and privacy laws. Without one, they can't release your private business energy information to a third party, even if you verbally give permission.

The energy industry takes customer data protection seriously. A valid LoA gives suppliers confidence that they are dealing with someone who has your explicit permission to access your data and act on your behalf.

It’s also worth noting that many brokers and consultants won’t begin working with you until an LoA is in place. It gives them the ability to fully research the market, gather accurate information, and find the most appropriate suppliers and contract types tailored to your business.

According to Ofgem's Businesses' experiences of the energy market research, 18% of UK businesses said they had made a complaint to their energy supplier in 2025, down from 23% in 2024, with billing issues and overcharging the most common causes. 

The same research found that 72% of businesses that used an energy broker were satisfied with the outcome. This serves as a reminder that a valid, carefully worded LoA is central to a broker's ability to resolve issues like these on your behalf.

What should be included in a letter of authority?

While there’s no single standard template for a letter of authority, there are certain details that every valid LoA should include. These help ensure that suppliers, brokers, and your own business all understand the scope and duration of the authorisation.

Key elements typically include:

• Your business name, registered address and company number
• The name of your appointed broker or consultant
• A clear statement outlining what permissions are being granted
• The duration or expiry date of the authorisation
• The signatures of authorised company representatives
• The date of signing

Many brokers will provide their own LoA template for you to review and sign. Before doing so, it’s always worth carefully reading the document to ensure you’re happy with what you’re agreeing to. 

It's also worth noting that you may not need to sign and return a paper contract. To speed up processes, an LoA can be signed digitally, using a service like DocuSign. If this is the case, bear in mind that the signature on the digital document may not match your actual signature (a handwriting-style typeface is often used). 

This is why it's important to remember what you signed, when you signed it, and why you signed it. 

How long does a letter of authority last?

The duration of a letter of authority depends on what you agree with your broker or consultant. Some LoAs are valid for a specific contract period, while others may last for 12 or 24 months or stay valid until you revoke them.

It’s important to note that you retain the right to withdraw your authorisation at any time. If you’re no longer comfortable with your broker’s involvement or want to switch providers, you can cancel the LoA by providing written notice.

In most cases, suppliers will stop dealing with the third party as soon as they receive confirmation that the LoA has been withdrawn.

How to protect your business when signing a letter of authority

There are several simple steps you can take to make sure your LoA protects your interests rather than exposes you to unnecessary risk:

• Read the document carefully before signing, and ask for clarification on anything you don’t understand
• Specify exactly which powers you are granting — and which you are not
• Set a clear time limit for how long the LoA remains valid
• Only work with brokers who are reputable, experienced, and transparent about their fees and commissions
• Keep copies of all signed documents for your records

Remember that signing an LoA does not mean you are handing over full control of your energy procurement. You remain the decision-maker and can revoke authorisation if needed.

In October 2025, the Department for Energy Security and Net Zero (DESNZ) confirmed that it intends to bring energy brokers and other third-party intermediaries under direct Ofgem regulation for the first time. 

The decision was made following evidence of hidden commissions and unclear fees affecting small business customers. 

Ofgem is expected to implement a formal registration scheme, meaning brokers may face tighter transparency requirements around commission and conduct in the coming years. 

Until this framework is in place, businesses could benefit from applying extra caution when granting broad powers in an LoA, and from checking a broker's fees and complaints process before signing. Remember, MoneySuperMarket partners with Bionic for business energy, and they will always fully disclose their commission before you sign anything.

Do you need a new letter of authority for each supplier?

Generally, a single letter of authority gives your broker permission to interact with multiple suppliers during their market search. You don’t usually need a separate LoA for each supplier being approached.

However, if you decide to change brokers or work with multiple consultants, each new broker would require a separate letter of authority from you. Suppliers will only recognise authorisations from the brokers named in the LoA.

Some suppliers may also need an updated or renewed LoA if your previous one has expired, or if there have been changes to your business name or legal structure.

What happens after a letter of authority is submitted?

Once you’ve signed a letter of authority, your broker can immediately start acting on your behalf. Because the letter is valid from the date you sign it, there’s no waiting around — your broker can contact suppliers, gather quotes, and search for better deals on your business electricity, business gas or both. It takes the hassle off your hands and makes switching simple, giving you peace of mind while they do the legwork.

Final tips before you switch

Always choose a broker you trust. Make sure you understand the letter of authority before signing it, and if they don't explain how they earn commission and how much they'll earn from your contract, ask them to find out. Be cautious about handing over personal details unless you’re sure who you’re dealing with.

If you’re ready to switch with business energy experts that are trusted by 200,000 UK businesses and counting, give us your postcode to start a business energy price comparison.

Letter of authority FAQs

Still unsure about what a letter of authority allows? Check out the answers to our most frequently asked questions.

Do I have to sign a letter of authority to get a business energy quote?

Not always. You can often get an initial quote or price indication without an LoA. However, your broker will usually need one before they can access your actual usage data, negotiate directly with suppliers, or manage a switch on your behalf.

Can I limit what my broker is allowed to do with an LoA?

Yes. An LoA can be written to grant only specific permissions, such as information access only, rather than full negotiating or contract-signing powers. Many businesses start with limited access and expand it once they trust the broker.

What's the difference between a letter of authority and a power of attorney?

A letter of authority is limited to specific business tasks, such as energy account access or negotiation, and can usually be withdrawn at any time. A power of attorney is a broader legal instrument, often used for financial or health decisions, and typically involves more formal legal processes to set up and revoke.

Can a letter of authority be used to switch my energy supplier without my knowledge?

No, not if the LoA is worded correctly. A properly drafted LoA should require your final approval before any new contract is signed, unless you have specifically granted contract-signing powers. This is why reading the wording carefully before signing matters.

Is my data safe once I've signed a letter of authority?

UK energy suppliers are required to protect customer data under data protection law, and an LoA only permits access to the specific information and actions it names. You should still only work with brokers who are transparent about how they store and use your data.

Do sole traders need a letter of authority in the same way as limited companies?

Yes. Any business structure — sole trader, partnership, or limited company — needs to provide a valid LoA before a broker can access supplier data or negotiate on its behalf. The document simply needs to reflect the correct legal name and details of the business.

What happens if I sign a letter of authority and then change my mind?

You can revoke an LoA at any time by giving written notice to your broker and, where relevant, your supplier. Once revoked, suppliers should stop dealing with that broker on your account.

Can more than one broker hold a valid letter of authority for my business at the same time?

Yes, in theory, but it can create confusion if multiple brokers are approaching the same suppliers on your behalf. Most businesses find it clearer to work with one broker at a time and issue a new LoA if they switch.