Letter of Authority (LOA)

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What is a Letter of Authority (LOA)?

Comparing energy suppliers, getting quotes and managing your energy bill can be wearisome and time-consuming, particular when you have a business to run and clients to service. That’s where a letter of authority (LOA) comes in, it is a legal document that authorises a third party or ‘agent’ to handle your energy supply within an agreed scope.

A typical user case for a letter of authority is when a business uses a commercial utility broker like Commercial Utility Consultants to support with bill management or to switch their business gas supply or business electricity.

 

What is the role of a Letter of Authority (LOA) in switching energy supplier?

When a business wants to switch it’s supplier, one of the easiest methods to do so is to engage the services of a commercial utility broker. The broker will search the market for the best deals and engage with the current supplier, however in order work on behalf of the business the broker needs a letter of authority.

 

Types of Letters of Authority (LOA)

There are two types of letters of authority, the first (Level 1 Letter of Authority) authorises access to only key information such as the current energy consumption data, the current contract and meter readings whilst the second (Level 2 Letter of Authority) gives the third party or ‘agent’ access to all energy supply data and the ability to sign contracts on their behalf.

 

How long does a Letter of Authority last? Does it have an expiry date?

The letter should state the length of its validity, a standard length normally documented is either six or twelve months. In the case where a length hasn’t been specified it is usually only considered legitimate for a period of twelve months from the date of it being signed.

 

Who is the signatory on the LOA?

The letter of authority must be signed by either the owner of the business, a company director or an authorised signatory from the organisation.

 

Can I write out a LOA of do I need a solicitor?

Many businesses and organisations use a standard template which they adapt, particularly for the Level 1 Letter of Authority. The letter ought to be clear and concise in outlining the level of authority being consented, so everything is transparent from the outset.

Whilst there isn’t a legal stipulation or requirement that you use a solicitor as with any legal document, it is advised that you have it checked by a legal professional before signing and authorising.

 

 

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