Member Article

Demystifying the Letter of Authority for energy purchasing

Before an energy consultancy can begin completing any work on behalf of an organisation, they must first obtain a Letter of Authority, often referred by its acronym (LoA).

The Letter of Authority is an important legal document that sometimes causes confusion among businesses, so what exactly is an LoA?

A LoA is a document signed by a business that allows a third party to correspond with UK energy suppliers on their behalf. Please note that a separate, specific LoA is usually required for water services.

It is used across different industries and is seen as a legal document. Within the energy industry, the requirement for a LoA means that no consultant or broker can act on your organisation’s behalf without formal, written permission to do so. For example, without a LoA, your consultant cannot:

• Collect data on your site and meter portfolio; • Liaise with suppliers to deal with burdensome billing queries; • Renew or switch energy contracts; • Find you a better deal on your energy rates.

It is important to note that many energy consultants will provide you with a template LoA so that they can act on your behalf. However, you must read the document through thoroughly to ensure you are not agreeing to any terms you may not be comfortable with. For example, a LoA shouldn’t give the consultant the right to agree to an energy contract with a supplier without the full consent of your organisation. So, despite handing the reigns of negotiation to a third party, you will still remain in full control of contract choice and placement.

This was posted in Bdaily's Members' News section by Inprova Energy .