What Is a Letter of Authority (LOA) and Why Your Energy Broker Asks for One

When you start working with an energy broker, one of the first things they will ask for is a signed Letter of Authority, usually shortened to LOA. For a lot of business owners, that request raises an eyebrow.

The good news is that an LOA is far simpler than it sounds. It is a permission slip, not a contract, and understanding what it does and does not allow puts you firmly in control.

Key takeaways

An LOA authorizes your broker to gather account information and request quotes on your behalf.
An LOA does not switch your supplier, sign you to a contract, or commit you to anything.
A clear LOA should be limited in scope and time, and you can revoke it whenever you choose.

What an LOA actually authorizes

A Letter of Authority gives your broker permission to act as your representative for the narrow purpose of gathering information and soliciting quotes. With it, a broker can pull your usage history, confirm your contract end date, and approach suppliers to request competitive offers tailored to your business.

Without an LOA, suppliers and utilities will not release your account details to a third party, which is exactly how it should be. The LOA is what makes a real, apples-to-apples comparison possible.

What an LOA does not do

This is the part worth repeating. An LOA does not enroll you with a new supplier. It does not sign you into a supply contract. It does not give a broker the power to change your service or commit your business to a rate. Those decisions remain entirely yours, and any actual contract requires a separate signature from you.

Why brokers need it to do good work

Accurate quotes depend on accurate data. A supplier pricing your business wants to see your real usage and demand profile, not rough estimates. The LOA lets your broker collect that information once and present it to many suppliers at the same time, which is how competitive bidding produces stronger offers.

It also saves you significant time. Instead of you contacting suppliers one by one and repeating your details, your broker handles the legwork with a single authorization.

What to look for in a well-written LOA

A trustworthy LOA is specific. It should name the accounts it covers, state that it is for the purpose of obtaining information and quotes, and include an expiration or a clear way to revoke it. Be cautious of any document that reads more like a contract than a permission slip, or that bundles in authority to switch your service automatically.

If anything in the language is unclear, ask. A good broker will happily explain every line, because transparency is the whole point.

How USA Energy uses your LOA

At USA Energy, we treat your LOA as a limited, revocable tool to do one thing well, run a competitive bidding process across more than 26 suppliers and bring you real fixed-rate offers. We use it to perform a free, no-obligation rate analysis, and nothing more. We never switch your supplier without your direct approval, and because we are paid by the supplier, the entire process is free to you. If your contract is approaching its end, the same authorization lets us explore a Blend and Extend option to lock a better rate before your current term expires.

If you would like to see what competitive offers look like for your accounts, a signed LOA and a free rate analysis are all it takes to get started.