Utility firm Extra Energy - which supplies electricity and gas to 108,000 households UK-wide - has ceased trading, Ofcom has said.
The firm is the second largest energy company to go out of business after GB Energy two years ago.
The collapse comes as it was announced that new energy suppliers may have to pass financial and customer service tests in order to obtain a licence under Ofgem regulations. Companies would have to demonstrate they have adequate financial resources and can meet their customer service obligations before being awarded a licence to supply energy under the new rules.
Consumer groups welcomed the new proposals. Alex Neill, Which? managing director of home products and services, said: “Measures to ensure suppliers are fit to enter the market and provide good levels of customer service are a positive step. Customers deserve to get an excellent quality of service and more must be done to encourage improved standards.”
The regulator said customers would be transferred to a new operator.
Philippa Pickford, Ofgem’s interim director for future retail markets, said: “If you are an Extra Energy customer, under our safety net, we will make sure your energy supplies are secure.”