FAQ: Why Do You Need an LOA or LOE?

LOA or LOE

By AJ Brockman

When you ask a Nania Energy rep to price your account, they’ll ask you for three things:

  1. A copy of your most recent energy bill,
  2. Your current contract end date, and
  3. To sign a Letter of Exclusivity (LOE) or Letter of Authorization (LOA)

In this post, we’ll cover the basics of LOEs and LOAs — what’s the difference, why we need them, and how they impact the pricing process.

What’s the difference between an LOE and an LOA?

An LOE gives a broker exclusive access to pricing from a supplier. It’s an industry standard, and it signals to the supplier that you only want them to send pricing to whoever submitted the LOE.

An LOA is not exclusive — a supplier will send pricing to anyone who submits an LOA on your behalf.

When it comes to signing authorization documents, there are a few rules of thumb:

  1. Identify your intent. If you only intend to work with 1 broker or consultant, sign an LOE. If you opt for an LOA, only sign one with brokers or consultants you’re currently working with or are strongly considering working with. Having too many authorization documents floating around can cause confusion for suppliers and you and slow down the pricing process. 
  2. Read through the document. There’s no industry standard when it comes to the language of an LOE/LOA. If the document contains the word “exclusive,” then you’re looking at an LOE.
  3. Look for term length. The LOE/LOA should clearly state how long it’s valid for.

See our LOE here:  Nania Energy Advisors – LOE

See our LOA here: Nania Energy Advisors LOA – Non-Exclusive

If I sign an authorization letter with you, can I still get pricing from my current broker?

It depends on which form you sign.

If you sign an LOA with us and your current broker, it’s possible that we will both receive pricing from the supplier. However, there most likely will not be a significant difference between the rates.

If you sign an LOE, the supplier will only send pricing to whoever submitted the LOE. An LOE trumps an LOA.

Side note: If a Nania Energy rep asks you to sign an LOE, they will let you know ahead of time which suppliers they’ll be submitting it to.

How long is an LOE/LOA good for?

Each company has its own LOA or LOE, and the restrictions and limitations vary for each.

Our LOA is good for 12 months. The term length for supplier-specific LOAs are typically between 6 and 12 months.

Does an LOE/LOA allow you to sign contracts for me?

NO. However, the form does allow us to sign utility usage request forms on your behalf.

A usage request form facilitiates the transfer of information from the utility to the supplier for pricing. Each supplier has their own utility-specific usage request form. We fill them out for you to keep the pricing process moving — and we’re not constantly pestering you for your signature.

Takeaway: Know what document you’re signing.

When an advisor or broker sends you an authorization letter to sign, look it over carefully to see whether they’ve sent you an LOE or an LOA. Knowing the difference between the two can speed the pricing process along significantly.

If you’re not sure which document you’re looking at, feel free to send it to us and we’ll be happy to help you identify it. And if you have further questions about LOEs and LOAs, comment below or contact us for more info.

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