Spark Energy has become the seventh energy supplier to cease trading this year.
The company, which supplies gas and electricity to around 290,000 householders, said it will be unable to continue doing so “due to increasingly tough trading conditions” in the energy industry.
However, customers’ energy supply will continue as normal and they have been advised not to switch providers yet.
Spark Energy’s customers are also being advised to take a meter ready for when their new supplier contacts them.
Mary Starks, Ofgem’s Executive Director for Consumers and Markets said: “Our message to energy customers with Spark is there is no need to worry, as under our safety net we will make sure your energy supplies are secure and your credit balance is protected.
“Ofgem will now choose a new supplier and ensure you get the best deal possible. Whilst we’re doing this our advice is to ‘sit tight’ and don’t switch. You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your new tariff. Although we have seen a number of supplier failures this year, our safety net procedures are working as they should to protect customers.”
The regulator has also proposed financial and customer service tests for new energy suppliers wishing to enter the market.