Letter of Authority (LOA) for Business Energy: What It Is and Is It Safe to Sign?

A Letter of Authority (LOA) is a short signed document that lets an energy broker request information about your supply from suppliers and industry bodies on your behalf. It is not a contract, it doesn’t switch your supply, and it doesn’t commit you to anything — but because it involves signing something, it’s also the step where business owners quite rightly pause and ask questions. This guide explains exactly what an LOA does and doesn’t authorise, why brokers ask for one, what a safe LOA looks like, and the red flags that should make you walk away.

If you’ve ever asked a broker for an energy quote and been sent an LOA to sign before they can do anything useful, that’s not a sales trick — it’s how the industry’s data access works. Suppliers won’t discuss an account with a third party without evidence of permission, and industry databases holding your consumption history require the same. The LOA is that evidence.

What a Letter of Authority actually authorises

A standard LOA lets the named broker:

• Request your supply details — meter numbers (MPAN/MPRN), meter type, current supplier.
• Obtain your consumption history — usually 12 months of usage data, which is what makes quotes accurate.
• Get your contract information — end date, notice period, current rates.
• Request quotes from suppliers on your behalf.
• Depending on its wording, serve termination notice on your current contract so you don’t get rolled over.

That last point is worth checking explicitly: some LOAs include notice-serving, some don’t. Including it is usually helpful — it protects you from the rollover trap we describe in our switching guide — but you should know whether yours does.

What an LOA does NOT do

This is the part that matters for peace of mind. A properly drafted Level 1 LOA does not:

• Switch your supply. Only a signed supply contract does that — a separate document you’d sign later, after seeing quotes.
• Commit you to using the broker. You can take the quotes and walk away.
• Allow anyone to sign a contract for you. Contract execution always needs your signature (the rare exceptions are explicit “Level 2” authorities, which you should only grant deliberately — see below).
• Give access to your bank account or payment details. An LOA is about information, not money.

Level 1 vs Level 2 LOAs

The industry distinguishes two levels of authority, and the difference is exactly where caution belongs:

• Level 1 (standard): information-gathering and quote-requesting only. The broker can find things out and negotiate, but every contract requires your signature. This is what you should expect to sign for a quote.
• Level 2 (extended): authorises the broker to act on your behalf — including agreeing contracts. Legitimate for some fully-managed corporate relationships, but never required just to get quotes. If a broker pushes a Level 2 LOA at first contact, decline it.

What a safe LOA looks like

Before signing, check these five things:

• Named parties. Your business name and the broker’s full legal company name (check it on Companies House) — not a vague trading style.
• An expiry date. Good LOAs are time-limited, commonly 12 months. Open-ended authority is a red flag — and if it’s missing, write an expiry in before signing.
• Defined scope. It should say what the broker may do (request information, obtain quotes, serve notice if included) — not grant unlimited authority “in connection with our energy supply”.
• No contract-signing power unless you deliberately intend Level 2.
• Revocability. You can withdraw an LOA at any time by writing to the broker and your supplier. A trustworthy broker will confirm this without hesitation.

Why brokers genuinely need it

Could you gather everything yourself and skip the LOA? In principle, yes: dig out 12 months of bills, find your MPAN and MPRN, phone your supplier for the contract end date and termination terms, then send the lot to whoever is quoting. In practice, the LOA exists because most businesses can’t quickly produce those documents — and because suppliers respond faster to standardised industry requests than to customers on hold.

With an LOA, a broker pulls your consumption profile from industry data, gets your contract position from the supplier, and returns priced, like-for-like quotes — usually within a working day. Without one, the quote is only as good as the estimates you typed into a form. (Our quote form works both ways: quick estimates first, LOA only if you want bill-accurate pricing.)

LOA red flags — when to walk away

• A Level 2 / contract-signing authority requested up front.
• No expiry date, and resistance when you add one.
• Pressure to sign before they’ll tell you anything at all about how they work or who pays them.
• Refusal to confirm in writing that the LOA is revocable.
• The company name on the LOA doesn’t match the company you think you’re dealing with.

Since 2024, energy brokers (TPIs) serving microbusinesses must also be signed up to a qualifying dispute-resolution scheme — meaning microbusiness customers can escalate broker disputes to the Energy Ombudsman. Ask any broker which scheme they belong to; hesitation is your answer.

The bottom line

A Level 1 Letter of Authority is a routine, low-risk document that exists to make your quotes accurate and your switch painless — and you can revoke it whenever you like. Treat it with the same sensible checks you’d apply to any business document, sign the right level, and it works entirely in your favour. For the bigger picture on what happens next, read our guides to choosing the right tariff type and comparing business energy prices — or start a free quote and see the process from the inside.

Frequently asked questions

Does signing a Letter of Authority commit me to switching?

No. A standard (Level 1) LOA only authorises information-gathering and quote requests. Switching requires a separate supply contract with your signature. You can take the quotes and decline them all.

Can I cancel a Letter of Authority?

Yes, at any time. Write to the broker (and optionally your supplier) revoking the authority. Time-limited LOAs also expire automatically — most are valid for 12 months.

Why does a broker need an LOA instead of just quoting?

Suppliers and industry databases won’t release account or consumption data to a third party without evidence of your permission. The LOA is that evidence — it’s what turns rough estimated quotes into accurate, bill-matched ones.

What’s the difference between a Level 1 and Level 2 LOA?

Level 1 authorises information-gathering and quotes only — every contract still needs your signature. Level 2 lets the broker act and agree contracts on your behalf, and should only be granted deliberately in managed corporate relationships, never as a condition of getting a quote.

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