An affordable and reliable energy supply is crucial to the operations of your business, but many business owners don’t have time to handle either the energy comparison or the administration of their account. That’s why many yield the handling of their energy contracts to an energy consultancy or broker. These intermediaries can help businesses compare and switch energy and handle negotiations with suppliers.
But before these consultants can step in, your business will need to provide them with a Letter of Authority (LoA). A Letter of Authority is a legal document that gives these third-party intermediaries the right to correspond with energy suppliers on your behalf.
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A Letter of Authority is a legal document that authorises a third party – often known as the ‘agent’ – to correspond with services on behalf of your or your business – known as the ‘principal’. The letter will specify the tasks the third party can handle for the principal. Letters of Authority are used in many UK industries.
In the energy market, they’re required before a broker or consultant can correspond with energy suppliers on your behalf. It will need to be signed and dated and submitted to the consultancy and generally also to your current energy supplier before they can act.
Letters of Authority will state how long they’re valid for. 12 months is standard. You’ll have to sign another one after that time to authorise your broker to continue acting for your business.
In the energy market, a Letter of Authority may grant a consultant the right to:
Typically, Letters of Authority won’t give these consultants the right to sign onto a contract without your consent. The only energy contracts you enter will be ones you specifically and personally have agreed to.
But each consultant will have its own letter of authority and you should read them carefully before signing, to ensure you’re not handing over too much power to these third parties.
Letters of Authority will often include language like below: