Letter of Authority (LOA) – What It Is and What You Should Know About It


If you have a business and want to change your electricity or energy provider, you must have heard about ‘Letter of Authority.’ Letter of authority is very important in the energy industry, but most people do not fully understand them or what their purpose is. This guide will help you understand what a letter of authority is, why you need one, and other details regarding it. Without any delay, let’s get into it. 

What is a Letter of Authority (LOA)?

Every business requires a reliable supply of energy to function smoothly, but most business professionals do not have enough time to submerge their heads into these matters. This is why considering a third party or energy Consultancy Company is a great alternative.

Third-party professionals can handle your energy comparisons, switch energy, administer accounts, and handle energy suppliers’ relations. But before you give the third party the rights and authority, you will need to sign a Letter of authority (LOA).

This is a legal document that allows a third party to act on your behalf and manage all your affairs related to energy and electricity. A written agreement between you and a third party in which you authorize them to act on your behalf and have access to information such as account information, billing details, and personal information.

What is the relationship between a LOA and switching energy suppliers?

To switch your business energy supplier, you need to get in touch with an energy broker. An energy broker is an agent that can switch your energy supplier on your behalf. This is the easiest and quickest way around. But by the law, you have to give your permission in a written form, a contract known as a letter of authority (LOA).

Is signing this letter safe?

Before you sign, you must carefully and thoroughly read it. You should properly understand the terms and conditions of the agreement before signing it, as is the case with every legal agreement.

Till when will your letter of Authority be valid?

Typically a Letter of Authority is valid for one year. This is the standard in the energy industry. However, this period of validity may vary if it is shorter or longer than a year; if so, it will be stated in the Letter. Once the agreement has expired, your agent or the third party will now be able to carry out the duties on your behalf, such as talking to suppliers. You will have to renew the contract and sign the letter of Authority again.


Running a business is not a piece of cake, and you get so occupied that you don’t get time to look at matters such as energy and electricity supply. This is why giving these matters into the hands of a third party is a great idea. Letter of Authority is the gateway to achieving this because it allows you to control a third party and let them handle it.


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Founded in 1994 by the late Pamela Hulse Andrews, Cascade Business News (CBN) became Central Oregon’s premier business publication. CascadeBusNews.com • CBN@CascadeBusNews.com

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