What is a letter of authority (LOA)?
Last updated: August 2026
A letter of authority (LOA) is a signed permission that lets an energy broker deal with suppliers on your behalf: requesting quotes, checking your usage and contract dates. Most last 6 to 12 months. It never lets anyone sign a contract for you, and you can cancel it in writing at any time.
"LOA" means other things in other places: leave of absence, or the length of a boat. In business energy it means this one-page permission slip, and that's the meaning this guide covers.
It exists because suppliers won't discuss your account with a stranger. Fair enough. Data protection law backs them up: they can't share your account details with anyone you haven't authorised. The LOA is you telling them, in writing, that we're allowed to ask.
What an LOA lets a broker do (and what it never should)
Brokers commonly split LOAs into two levels. The split is industry practice, not an Ofgem classification, but it's the distinction that matters.
A level 1 LOA, sometimes called a soft LOA, lets a broker request quotes and ask your supplier for three things: how much energy you use, when your contract ends, and how much notice you have to give. That is the whole list. It cannot be used to sign a contract or switch your supplier.
A level 2 LOA, the full version, lets a broker agree supply contracts and move you to a new supplier without coming back to ask.
Brokers draw the level 1 line in different places, so check where yours sits. Some include the right to send renewal or termination notices for you. Ours doesn't. We can see your notice period. We cannot serve notice with it.
Level 1 is all the permission that comparison and switching work needs. Ours is a level 1. We can look, we can ask, and we cannot sign. Every contract carries your signature, not ours.
That last part matters more than it sounds. Business energy has no cooling-off period, even for contracts agreed by phone. Once you're in, you're in. A level 2 LOA hands that irreversible moment to someone you met last Tuesday. We won't take that permission. If a broker asks you for it, ask them why, and read our guide to energy brokers and commissions before you answer.
Same document, same rules, either fuel. Get a business gas or electricity quote.
What ours looks like
GRAPHIC: annotated Nettle LOA, one page
One page, plain English. It names your business, your meter, and us. It lists what we may do: request quotes, usage data and contract details from suppliers on your behalf. It lists what we may not do: agree, sign or end anything. It carries a start date and an end date. Ours runs for 12 months, then expires on its own. No auto-renewal, no small print.
The signature needs to come from someone with authority to act for the business: an owner, a director, or a partner. Suppliers check, and an LOA signed by the wrong person stalls the quote.
If any broker's LOA is longer than a page, undated, or vague about signing rights, those are the three things to read twice before you sign once.
How to cancel an LOA
To withdraw an LOA, write to both the broker and your energy supplier: your business name, the date you signed the LOA, and one line saying you withdraw it. Ask each of them for written confirmation. Email is best, because it gives you a timestamped record. No fee applies, and no explanation is owed.
If a broker makes cancelling difficult, that tells you what you needed to know. Since December 2024, suppliers may only work with brokers that belong to a redress scheme, and small businesses can take broker complaints to the Energy Ombudsman. You qualify on any one of three tests. Fewer than 50 employees, with turnover of £6.5m or less or a balance sheet total of £5m or less. Or no more than 200,000 kWh of electricity a year. Or no more than 500,000 kWh of gas. You're not stuck.
Questions people ask us
- Is an LOA legally binding?
Yes, but narrowly. It makes the permissions you've granted enforceable. It does not commit you to buy anything, lock you into a contract, or create any financial obligation. The only document that can cost you money is a supply contract, and a level 1 LOA cannot sign one.
- How long does an LOA last?
Typically 6 to 12 months. That's market convention, not a rule set by any regulator, and some suppliers won't accept an LOA for longer than 12 months whatever it says. Ours runs for 12 months and then lapses. We ask again rather than assume.
- Can I cancel an LOA?
Yes, at any time, in writing to both the broker and the supplier. It costs nothing and needs no reason.
- Do I need an LOA to get a quote?
Not for a rough number: a recent bill gets us close. An accurate like-for-like quote needs your real usage and contract end date, confirmed with your supplier, and that's what the LOA is for.
- Do I need a separate LOA for each supplier?
No. One LOA covers every supplier we approach for quotes. A different broker would need its own, though. An LOA names the broker it authorises and doesn't transfer.
- What happens after I sign one?
We send it to your current supplier, who verifies it and releases your usage and contract end date. Then we quote against your real numbers. Nothing else happens until you decide.
- Does an LOA let a broker switch my supplier?
A level 2 LOA does. Ours doesn't. The switch only starts when you sign the contract yourself.
Sources: Energy Solutions, letter of authority guide (industry practice on LOA levels and typical validity; updated May 2026, accessed August 2026); Business Energy UK, letter of authority guide (updated September 2025, accessed August 2026); Energy Ombudsman, energy broker disputes (small-business eligibility, accessed August 2026); Ofgem press release on business protections, 5 April 2024 (redress scheme and Energy Ombudsman rules effective December 2024); Ofgem, Third Party Intermediaries guidance (October 2022).