Last updated: Monday 14 September 2026 (Europe/London).
Next update: when Ofgem or the Retail Energy Code republish TPI / Letter of Authority templates or licensing status changes.
By: Switch Editorial Team, Switch Squid Ltd
A Letter of Authority (LOA) is the document that lets a UK business energy broker or other third-party intermediary (TPI) speak to suppliers about your meters, contracts and renewals — it is not itself an energy tariff, and it is not a reason to invent deemed pence rates. As of 14 September 2026, Ofgem still does not license energy brokers. That makes the LOA wording, commission disclosure and your right to revoke the document the whole game. If you only remember one line: you can revoke an LOA in writing, and you should send that revocation to both the broker and your supplier.
I am Switch. This guide is for SME and microbusiness buyers who keep getting LOA PDFs in their inbox. It explains what an LOA does, how brokers use it, what to check before you sign, how to revoke it, and where SwitchSquid’s business energy hub fits when you want a structured compare rather than a cold call.
Compare business energy on SwitchSquid →
What a Letter of Authority is — and is not
An LOA is written permission. Typically it names your business, the TPI, the sites or MPANs/MPRNs in scope, the actions allowed (requesting usage data, receiving contract proposals, serving notice, sometimes signing), and a duration. It is not a supply contract. It does not move your meter by itself. It does not guarantee a cheaper unit rate. It does authorise someone else to obtain information suppliers will not hand to a random caller.
Ofgem’s microbusiness TPI guidance is clear on roles: your supply contract is always with the licensed supplier; the TPI advises or procures; you should not feel pressured to use a TPI. Ofgem also states it does not license TPIs, and it has warned about scams claiming Ofgem can force brokers to repay historic commissions.
LOA checklist table (what to verify before you sign)
| Check | Why it matters | Healthy answer |
|---|---|---|
| Named TPI legal entity | Avoid vague “the consultant” | Full company name + company number |
| Scope of authority | Data-only vs notice vs signing | Matches what you actually want |
| Sites / MPANs listed | Stops over-broad access | Only meters you intend |
| Duration + refresh | Draft REC TPI CoP LOA refreshes after 12 months unless a supply contract is placed via the TPI | Dated end + revoke-anytime clause |
| Sub-broker / aggregator | Your data may be shared down a chain | Named if used |
| Commission acknowledgement | Cost often recovered via your unit rate | How pay is earned, in writing |
| Dispute / ADR scheme | Micro/small business brokers should point to a qualifying dispute scheme | Named scheme before you complain |
| Signing power | “Level 2” style LOAs can allow contracts without a further countersign | Prefer explicit approval for new contracts |
Sources dated around this sprint: Ofgem guidance “Third Party Intermediaries: what your microbusiness needs to know”; Retail Energy Code draft TPI Code of Practice Annex 2 (standard LOA minimum requirements, 12-month refresh, revoke-by-written-notice, commission acknowledgement); industry commentary on Level 1 vs Level 2 authority. No supplier deemed unit rates invented here.
How brokers actually use your LOA
Day to day, a broker with a valid LOA will pull consumption history, ask suppliers for renewal offers, calendar your end dates, and present a recommendation. That can be useful if you run five sites and do not want to live in portal passwords. The risk starts when the LOA is wider than the service you thought you bought — especially if it allows the TPI to serve termination notices or enter new contracts without a fresh signature from your director.
Industry practice often labels narrower authorities as “Level 1” (data, quotes, sometimes notices) and broader ones as “Level 2” (contracting power). Labels are not standardised law. Read the verbs in your PDF. If it says the TPI may “enter into” or “execute” supply agreements on your behalf, treat that as a board-level decision, not a receptionist countersign.
Commission, conflicts and why “free” is not free
Most business energy brokers are paid by suppliers through commission embedded in the unit rate or standing structures you eventually pay. The draft REC TPI CoP LOA text includes an explicit commission acknowledgement: the customer understands the broker may be paid by the supplier and that cost is recovered via charges. That is the honest framing. A broker who will not explain how they are paid is not a mystery — they are a red flag.
Conflicts appear when a broker only shows panels that pay them best, not the whole market. Ask whether they are whole-of-market, which suppliers they cannot access, and whether any preferred-supplier deals change the commission. Compare at least one direct supplier quote on a quiet day so you have a baseline — our business energy hub is built for that structured compare habit.
How to revoke a Letter of Authority
You can revoke an LOA. Do it in writing. A practical sequence:
- Write a short revocation email or letter naming your business, the TPI, the LOA date/reference, and the meters in scope.
- State clearly that all authority is revoked with immediate effect.
- Send it to the TPI and to each supplier that may hold a copy.
- Ask for written acknowledgement.
- Change any shared portal passwords the TPI used.
The draft TPI CoP expects a TPI to promptly tell suppliers when a registered LOA is revoked. Do not rely on the TPI alone — tell the supplier yourself. Revocation stops future authority; it does not automatically unwind a supply contract you already signed (or that a wide LOA already authorised). Contract disputes need separate advice.
Microbusiness protections and ADR
If you are a micro or small business, Ofgem’s TPI note says your broker should be signed up to an alternative redress / qualifying dispute settlement scheme. Ask which scheme before you have a problem. Your supplier may also be able to tell you which scheme a broker is registered to. Ofgem does not approve those schemes itself, and it does not run a licensing regime for TPIs — another reason your LOA hygiene matters more than a logo on a cold-call script.
Ofgem rejected REC modification proposals that would have forced a mandatory accredited TPI regime via supplier licence conditions (decision on R0137/R0137A). The voluntary TPI Code of Practice remains part of the landscape. Treat “we’re accredited” claims as questions: accredited to what, by whom, and can you see the LOA template they use?
LOA red flags — walk away
- Unsigned or undated PDFs with the TPI already filled in after a phone call you barely remember.
- Authority to sign new contracts without a further director approval.
- No commission disclosure.
- Pressure to “sign today or lose the rate” without a written quote summary.
- Requests for wet-ink authority on every letterhead variant without explaining why.
- Claims that Ofgem appointed them or that revocation is impossible.
When an LOA is still worth it
Multi-site retailers, light industrial units with messy renewal calendars, and busy finance teams often benefit from a competent TPI — if the LOA is narrow, dated, commission-transparent and revocable. Solo microbusinesses with one electricity MPAN can often tender direct or via a transparent compare hub without handing anyone notice-and-sign powers. Match the tool to the complexity.
For deemed / out-of-contract business rates, see our separate deemed-business guide from Day 1 rather than mixing those pence into an LOA explainer. LOAs and deemed rates collide in real life — a broker with authority may move you off deemed — but the documents are still different jobs.
Practical next steps for UK SMEs this week
- Find any LOAs already on file; diary their end dates.
- Ask suppliers which TPIs are registered against your account.
- Revoke anything you do not recognise.
- If you appoint a new TPI, use a narrow LOA with a 12-month refresh mindset and written commission terms.
- Keep tendering discipline on the business energy hub so you are never dependent on a single inbox.
FAQ
What is a Letter of Authority for business energy?
It is written permission for a broker/TPI to deal with suppliers about your energy accounts within a defined scope. It is not the supply contract itself.
Does Ofgem regulate energy brokers?
Ofgem does not license TPIs. It publishes guidance for microbusinesses and has set voluntary principles; dispute schemes and codes of practice sit alongside that.
Can I revoke an LOA?
Yes. Give written notice to the TPI and your suppliers, keep proof, and ask for acknowledgement. Draft CoP wording also expects TPIs to notify suppliers of revocations.
How long does an LOA last?
Check your document. Draft REC TPI CoP standard wording refreshes after 12 months unless a supply contract is entered via the TPI during that window (then it can track that contract unless revoked).
What is the difference between Level 1 and Level 2 LOAs?
Industry shorthand: narrower (data/quotes/notices) vs broader (contracting). Always read the verbs — labels vary by firm.
Are broker services free?
Usually commission is paid by suppliers and recovered through your charges. Ask for the mechanism in writing.
Can a broker switch me without asking?
Only if your LOA (or a separate authority) actually grants signing/switching power. If it does, revoke it or renegotiate a narrower form.
Where do I compare business energy deals?
Start with our business energy hub and keep any LOA narrower than your comfort with signing authority.
