Letter of Authority: How an Energy Broker Switches You

If you have ever asked a broker for business energy quotes, you will have been asked to sign a letter of authority before anything else happens. It is the one piece of paperwork that stands between you and a cheaper contract - and it is the bit most owners pause on. Here is what it actually is, in plain English, and how to stay in control of it.

What is a letter of authority?

A letter of authority (often shortened to LoA) is a short signed document that gives your broker permission to act on your behalf with energy suppliers. Think of it as a permission slip, not a contract. It does not commit you to buy anything and it does not cost you a penny. It simply tells suppliers: this person is authorised to ask about my supply and to talk to you on my behalf.

Without one, suppliers will not release your consumption data to a third party, and no broker can build a real quote for you.

What a letter of authority lets a broker do

Signed properly, your LoA gives your broker a narrow and clearly defined set of permissions:

• Ask your current supplier for your usage, unit rate and standing charge data
• Confirm your contract end date and renewal terms
• Request quotes from a range of suppliers on your behalf
• Submit a switch or renewal once you have chosen a quote
• Chase suppliers, handle objections and manage the switching paperwork for you

That last point matters more than it sounds. Most of the delay and frustration in a business energy switch is admin, not price. The letter of authority is what lets someone else sit on hold so you do not have to.

What a letter of authority never lets a broker do

This is the part worth reading twice. A letter of authority is not a power of attorney, and it is not a blank cheque.

• It does not let a broker sign a supply contract for you - a new contract still needs your approval
• It does not authorise anyone to change your direct debit or payment details
• It does not let them alter your meter, your supply or your account records
• It does not give them access to your money beyond a supplier's own billing
• It does not last forever - most letters are dated and time-limited

If anyone tells you a letter of authority is "just a formality" and refuses to explain the wording, that is a reason to slow down, not speed up.

Why a broker needs one before they can quote

You might wonder why the signature comes before you see a price. The answer is data. Your usage figures sit with your current supplier, and a supplier will not hand another company your annual or half-hourly usage without written permission from you. Without that data a broker can only guess at your consumption, which means a quote that is either padded or wildly optimistic.

There is a timing reason too. Business energy contracts roll into out-of-contract rates when they end, and those rates are usually the most expensive on the market. The earlier your broker can see your end date and start gathering prices, the more room there is to compare and switch before the renewal window closes.

How to sign, limit and cancel your letter of authority

Signing it

Sign only for a named broker or brokerage, never for a generic "any representative". Check that the company name and registration details match the firm you actually spoke to. A well-drafted letter carries your business name, the site or meter it relates to, and a clear end date.

Limiting it

You can narrow a letter of authority as much as you like. Common limits include a single meter or site, electricity only (or gas only), a fixed term such as three months, and quotations only - with no authority to switch until you give a separate written go-ahead. If you run several sites, ask for one letter per site so that a problem with one does not affect the rest.

Cancelling it

You can cancel a letter of authority at any time by writing to the broker. A short email asking them to withdraw the letter and confirm it in writing is enough, and copying in your supplier is even better. Any switch already submitted has to be dealt with separately, so ask for written confirmation of what has and has not been progressed.

How Equal Payments handles your letter of authority

We use a single, plain-English letter of authority. Upload your latest gas or electricity bill, sign once, and we go to the market on your behalf - comparing gas, electricity and 100% green tariffs, and coming back to you with a quote within 24 hours. You see the numbers, you decide, and only then do we arrange the switch.

Our service is free to you. Suppliers pay the broker fee, which is how we do the legwork without charging you a penny. If you would rather the letter was limited to one site, or to quotes only, just say so and we will write it that way.

The bottom line

A letter of authority is permission, not obligation. It lets a business energy broker see your usage, get you real prices and take the supplier admin off your desk - and it stops well short of letting anyone commit you to a contract or touch your payments. Sign it with the right name, term and scope on it, keep a copy, and you keep control of your supply while somebody else does the chasing.