Somewhere in every commercial energy deal there's a one-page form called a letter of authorization, or LOA. It's the document a broker or supplier asks you to sign before they can do anything useful — and because it's short and routine, most business owners sign it without really reading it. That's usually fine, but an LOA does grant real access to your account, so it's worth understanding exactly what you're authorizing and where the limits should be.

This guide explains what an energy letter of authorization is, why it's required, the difference between an LOA and an actual contract, and how to sign one safely.

What Is an Energy Letter of Authorization?

An energy letter of authorization is a document in which you, the account holder, grant a third party — typically an energy broker or consultant — permission to act on your behalf with your utility and with energy suppliers. In practical terms, it lets them do two things:

• Pull your usage and account data from the utility. To price your supply accurately, a broker needs your historical usage, your interval data, your rate class, and your account numbers. The utility won't release that to anyone but the account holder — unless an LOA is on file naming the broker as an authorized party.
• Request quotes from suppliers on your behalf. The LOA tells suppliers the broker is authorized to shop your load, so they'll return real, account-specific pricing instead of a generic estimate.

That's it. A standard LOA is an information and quoting tool. It's the key that unlocks the data needed to run a real procurement — nothing more.

What an LOA Does NOT Do

This is the part that worries people, and the reassurance is simple: a letter of authorization does not switch your supplier, sign you to a contract, or commit you to anything. The crucial distinction is between authorization and execution:

• An LOA authorizes someone to gather information and obtain quotes. It is not a purchase.
• A supply agreement is what actually changes your supplier and your rate. That's a separate document that you — the account holder — must sign yourself. No LOA, on its own, can move your account onto a new contract.

So signing an LOA can't accidentally lock you into a deal. The worst a standard LOA can do is let a broker see your usage and bring you offers. You remain in full control of whether you ever accept one. If you want to understand what happens after the quotes come back, our guide to switching your business energy supplier walks through the actual execution step.

Why Brokers Need One to Get You a Good Rate

It can feel backwards to sign a form before you've agreed to anything — but without an LOA, a broker is flying blind. They can only quote your real load if they can see it. An honest, account-specific quote requires your interval data and rate class; a quote produced without them is a guess that will get re-priced (usually upward) the moment a supplier sees your actual usage.

The LOA is what lets a broker take your true load to multiple licensed suppliers and run them against each other on identical terms — the competitive process that produces a genuinely low rate. Skipping it doesn't protect you; it just guarantees softer, less reliable numbers.

How to Sign an LOA Safely

Most LOAs are harmless, but a few are written too broadly. Before you sign one, check these points:

• Confirm it's non-exclusive. A good LOA lets a broker shop on your behalf without preventing you from talking to anyone else. Avoid any LOA that grants a single broker exclusive rights to your account.
• Check the expiration. An LOA should expire — 6 to 12 months is typical. You don't want an open-ended authorization sitting at your utility indefinitely. Many include a clear end date or a right to revoke in writing at any time.
• Make sure it can't bind you to a contract. The language should authorize data access and quoting only. If an LOA reads as though it also empowers the broker to execute a supply agreement for you, don't sign it as-is.
• Know who you're authorizing. An LOA is a small act of trust. Make sure the broker is licensed, transparent about how they're paid, and someone you'd want holding your account data. Our guide to vetting an energy broker covers what to look for.
• Keep a copy. Save the signed LOA and note its expiration so you know exactly what's authorized and for how long.

Our Recommendation

A letter of authorization is a normal, necessary first step in shopping your commercial energy — not a commitment to buy anything. Signed with a reputable, transparent broker, it's simply what lets them see your real usage and bring the whole market to compete for your load. The protections that matter are keeping it non-exclusive, time-limited, and strictly limited to data and quoting, and knowing the only document that can ever change your supplier is a supply agreement you sign yourself.

We've held LOAs for more than 4,000 commercial clients across every deregulated market in the U.S., on a transparent-commission basis. Our standard LOA is non-exclusive, time-limited, and authorizes nothing beyond pulling your data and quoting your load. Send us a recent bill and we'll show you what a competitive rate looks like — no commitment of any kind.