Around 130,000 households across Britain will need a new energy supplier after Tonik Energy failed on Tuesday, regulator Ofgem has said.
Officials said they were working to protect customers at Tonik, after it ceased to trade.
For now, customers will be able to sit tight, and Ofgem will appoint a new supplier to take over their accounts in a few weeks.
If customers do not like their new energy supplier, they will be able to change to another afterwards.
“Tonik Energy customers do not need to worry, as under our safety net we’ll make sure your energy supplies are secure and domestic customers’ credit balances are protected,” said Ofgem director of retail Philippa Pickford.
“Ofgem will now choose a new supplier for you and whilst we are 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.”
Tonik’s failure comes less than a week after it was identified as one of seven suppliers that had not paid a combined £34 million that they owed to Ofgem.
In the past, companies that have missed their so-called renewables obligation payments have often struggled to continue trading.
High-profile failures include Economy Energy, Solarplicity, and Spark Energy.
Tonik was one of seven suppliers named by Ofgem on Friday – a list that also included Co-Operative Energy Limited, Flow Energy Limited, MA Energy Limited, Nabuh Energy Limited, Robin Hood Energy Limited and Symbio Energy Limited.
On its website, Tonik said: “Tonik Energy… is ceasing to trade. Ofgem, the energy regulator, is appointing a new supplier for its customers.
“Customers need not worry, their supplies are secure and domestic credit balances are protected.”