What Is a Letter of Authorization (LOA) and Why Is It Required To Get an Energy Quote?

When switching to a new energy supplier in a deregulated market to finalize an energy contract, it’s not just as simple as asking for a price and getting a number. There’s paperwork, and among the first things you’ll encounter is the Letter of Authorization, or LOA. The name might sound formal (and maybe even a little intimidating), but the reality? It’s a low-stakes, high-importance step designed with your business’s interests in mind.

What Signing an LOA Means

Let’s clear up the biggest misconception: Signing an LOA does not mean you’re locked into a contract or any commitment with a supplier (read that again). Instead, it simply permits a supplier or broker to request your account’s historical usage data from the utility. Signing one is not binding. It doesn’t commit you to buy anything, switch providers, or hand over sensitive info.

Commercial energy pricing isn’t one-size-fits-all. The specifics of your usage—how much energy you use, when you use it, and how it fluctuates seasonally—can dramatically affect what you pay. A supplier empowered by an LOA can craft a competitive, accurate quote tailored for your business rather than an approximation or a “ballpark figure.” It’s about precision and putting you in a stronger negotiating position. Some states (like New York) require an LOA to access anyone’s utility information, but not all states require it.

Why Suppliers Need Your Usage Data

Think of it this way: Would you expect an insurance agent to give you an accurate quote without knowing your driving record? Or a tailor to measure you for a suit without taking your measurements? That’s the role of the LOA when it comes to energy sourcing. It’s all about equipping suppliers with the details they need to offer a quote that’s genuinely tailored to your business needs. Without your actual usage data, any quote is just an educated guess, which is hardly helpful when you’re making big decisions for your bottom line.

Privacy and Procedural Safeguards

So why all the formalities? Privacy rules and regulations bind utility companies; they can’t just hand over customer data to anyone. The LOA serves as your explicit, written say-so, clearing the way for suppliers to request your usage and billing history directly from the utility. This ensures your privacy is protected throughout the process, keeping your data safe and secure.

This also streamlines the quote process with real data versus working with estimates. With the LOA in place, suppliers receive accurate, detailed information directly from your utility, eliminating the need to hunt down spreadsheets or second-guess. The result is faster, more precise quotes that reflect your daily operations and needs.

Take the First Step  

If you’re ready to get started with an energy quote, consider the LOA your first step toward clarity, transparency, accuracy, and control. It’s the paperwork with a purpose—making sure the quote you get reflects your real energy usage, not just a wild guess. Catalyst Power^® Energy Experts know all about the LOA process and, when you’re ready, can walk you through it.