What Is a Letter of Authority in Business Energy
A Letter of Authority (LOA) lets a broker or third-party intermediary act on your behalf with suppliers and sometimes networks. Done well, it speeds up quotes; done badly, it creates consent sprawl and GDPR headaches. In Great Britain, Ofgem’s broker conduct rules and microbusiness transparency expectations mean your LOA should spell out scope, duration, and remuneration in plain English—not vague “market-wide” permissions.
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Key takeaways
- Limit LOAs to named companies, named MPANs/MPRNs, and explicit purposes (pricing, renewals, data access).
- Set an expiry date and revoke in writing when you change broker—keep proof of delivery.
- Commission disclosures should appear before you bind, aligned with microbusiness rules where applicable.
- Personal data on directors needs a lawful basis under UK GDPR; do not over-share IDs “just in case”.
- An LOA is not a contract to supply energy—it only unlocks conversations; you still sign the supplier agreement.
What suppliers do with a valid LOA
Retailers use LOAs to obtain consumption profiles, loss factors, and meter technical details from industry systems. For half-hourly electricity, data may flow through appointed data collectors and aggregators governed by market codes administered alongside Elexon processes. A tight LOA prevents a third party from shopping your data to unrelated desks or re-trading your profile without fresh consent.
Networks occasionally need landowner permission for connection works; do not confuse those consents with a commercial broker LOA. If a document bundles grid access and brokerage, split it so legal and procurement teams know what they signed.
Clauses that belong in every business LOA
Name the legal entity, company number, site addresses, and each meter identifier. State whether the broker may accept verbal pricing indications or only written quotes. Include a non-assignment clause or approval right if the broker might sell your book to another TPI. Capture how notices are served—email to specific inboxes reduces “we never got it” disputes.
Add an explicit right to revoke without penalty beyond work already performed. If the broker embeds cancellation fees, reconcile them with your wider supply contract review so liabilities do not stack silently.
Data minimisation and ICO-aligned habits
Share director passports only when a supplier’s KYC process truly requires it. Redact bank details unless mandated for direct debit setup. Ask brokers where data is stored, how long it is kept, and which subprocessors see half-hourly files. UK GDPR accountability expects you to evidence decisions—log version numbers of LOA templates you deploy group-wide.
Multi-site and franchise wrinkles
Parent companies sometimes centralise procurement while subsidiaries hold the supply agreements. LOAs must track legal capacity—who signs, who pays, and who owns the meter point relationship. Franchisees should not blindly sign head-office LOAs if they are the named customer of record.
Regulatory backdrop: Ofgem, not the Ombudsman drafting your LOA
Ofgem shapes licence conditions; it does not provide a statutory LOA template. Market codes from Elexon and retail processes define what data parties can see, but your contract law still governs agency. Treat climate-policy headlines from the Climate Change Committee as context for future levies, not as a reason to grant perpetual data rights.
LOA review matrix
| Clause topic | Pass/Fail signal | Action |
|---|---|---|
| Scope of authority | Lists explicit tasks | Reject “any and all” wording |
| Duration | End date or renewal event | Auto-renew only if capped |
| Commission | £ figure or clear % basis | Ask who uplifts pass-through |
| Data use | Purpose limitation stated | Add deletion timeline |
| Sub-brokers | Named or prohibited | Block silent assignments |
Execution checklist
- Countersign with two directors on high-spend portfolios or add board minute reference.
- Upload a PDF copy to your VDR alongside the active supplier contract.
- Calendar a renewal review 30 days before LOA expiry.
- If switching broker, email revocation to suppliers the same day you appoint the replacement.
Supplier desk realities: what slows LOA processing
Retail onboarding teams match LOA signatories to Companies House data and anti-fraud watchlists. Mismatched titles (“Director” vs “Owner”) or missing company numbers trigger manual queues. For half-hourly sites, suppliers may wait for DC/DA alignment before releasing full interval history—expect days, not minutes, even when an LOA is valid.
Keep a single PDF master and version tag in the filename (v3, date). Forked copies emailed to five brokers create conflicting authorities and can breach your own internal controls. If a supplier insists on their template, run legal comparison against your master rather than accepting markup in email threads.
Related guides
Pair this with GDPR and energy brokers and broker vs direct supplier, or browse the energy hub.
What do you want to do next?
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