Ready to give your business energy broker control to make deals on your behalf with a Letter of Authority (LOA)? This is the first step in making big savings on your energy bills.
Here we have a complete guide with a sample template you can use free.
What’s in this guide?
What is a letter of authority?
A Letter of Authority (also sometimes known as an authorisation letter) is a legal document that allows a third-party to correspond with a supplier on behalf of your business. In the context of business energy, this means that an energy broker or agent is assigned as your third party and can liaise with energy suppliers for you.
This document needs to be signed by you as well as agreed to by your broker before any action can be taken. Authorisation letters are generally valid for up to a year and you will have to sign a new one if you want to continue outsourcing your business energy management to a third party.
What is a letter of authority used for?
A letter of authorisation means that you have allowed a third party to liaise with your energy supplier. The individual or entity you assign to do this is known as a broker, and can ask for information as well as perform functions for you such as:
- Liaise with your supplier and handle billing issues
- Handle issues related to your business energy supply and account management
- Request energy information such as bills and debt information
- Access historical account information including history of energy consumption, supply numbers, pricing information, and contract dates
- Raise and handle complaints with your supplier
- Request VAT or Climate Change Levy exemptions on your behalf
- Schedule appointments for site visits of the installation of equipment like smart meters
- Renew your current energy contract or terminate it
- Switch your energy supplier and set up a new contract
- Contact and obtain prices from other energy suppliers and negotiate with them
Switching suppliers with a letter of authority
Switching energy suppliers can be a time-consuming process. With the number of suppliers, different tariff types, and variation in energy prices depending on location and other factors – it can also get quite confusing. This is why many companies in the UK tend to stick with their current suppliers and continue paying higher than required prices for business energy.
The most efficient way to switch energy suppliers is through an energy broker. However, energy brokers cannot liaise with suppliers on your behalf without your written permission. A Letter of Authorization grants energy brokers the authority to compare different tariffs and find the most competitive one for your business. The broker can also oversee the transition between your previous and new energy supplier, ensuring that there are no interruptions to your supply in the meanwhile.
How to write a Letter of Authority
Writing a Letter of Authority is simple. You can either choose to write it yourself, edit an easily available template found on most energy suppliers’ websites, or get an agency to do it for you. In this document, you need to authorize a third party to liaise with your energy supplier, and give them consent to manage the account directly. The document needs to be signed by your energy broker as well.
It is up to you to define the level of authorization you can provide. You can choose to provide access to information only – for example, the amount of your current bills, payment terms, energy readings, past energy consumption, etc. This can help your energy broker request different quotations from energy suppliers and find you a competitive energy tariff.
If you’re looking for more comprehensive energy management, you can also authorize your energy broker to act on your behalf, including allowing them to switch contracts, contact different suppliers, request information, schedule equipment installation, and much more.
Whatever level of access you wish to provide, you must ensure that it is detailed in the Letter of Authorization to avoid ambiguity, since otherwise, it may allow brokers to carry out undesired actions on your account.
Tips on writing a letter of authority
- Make sure to use a company letterhead, since it is an official document.
- Start by mentioning the name and address of your company, which is the one granting authorization.
- The main paragraphs can consist the details of the authorisation such as the relationship between yourself and the third party, terms of the authorisation (level of information access) and the duration of the agreement.
- Include the complete name, address and contact details of both you, and your broker.
- Be clear and concise with the information that you provide, since this can be used as legal evidence in the future. There should be no ambiguity of information – ensure to specify all clauses clearly.
- Most energy suppliers provide ready to use templates for LOAs, but even while using these, make sure that you remove any unwanted clauses that are there by default.
- Ensure to have multiple copies made for future reference.
Sample Letter of Authority
Your Name / Company Name
TO WHOM IT MAY CONCERN:
I, the holder of account <Account Details> hereby authorise the below named person / entity to manage this account on my behalf.
This authorisation includes said person receiving access to information regarding my previous bills and energy consumption, payment terms, and any other account activity, past or present.
Additionally, I give my permission to the said person to take action on my account. This includes : terminating contracts, requesting quotations from new suppliers, and make any payments with respect to my account.
This named person will be act on my behalf until I cancel this authorisation by a written confirmation.
<You> <Your broker>