Energy supplier Zog Ltd has collapsed into administration, affecting an estimated 11,700 domestic customers.
It becomes the fifteenth provider to collapse since October 1 amid spiralling gas prices.
Under Ofgem’s supplier of last resort safety net, households will continue to receive gas and electricity while a new supplier is allocated.
The regulator will now liaise with the energy market to assign a replacement provider for all those affected.
Any credit balances will be protected during the switchover. Households will be switched onto a standard variable tariff which will be covered by the energy price cap.
Ofgem’s advice to affected customers in the interim is to wait until a new supplier has been appointed.
Customers will be contacted once a replacement provider has been assigned. In the meantime, the advice is to take a meter reading.
In recent weeks there has been an unprecedented increase in global gas prices which is putting financial pressure on suppliers.
Last week, renewable energy giant Bulb entered special administration, admitting it could no longer keep up with wholesale costs.
Firms say they’re struggling to shoulder the costs of wholesale prices, which they’re having to absorb because of the energy price cap.
Neil Lawrence, director of retail at Ofgem, said: “Ofgem’s number one priority is to protect customers. We know this is a worrying time for many people and news of a supplier going out of business can be unsettling.
“I want to reassure affected customers that they do not need to worry, under our safety net we’ll make sure your energy supplies continue."
He added: "Ofgem will choose a new supplier for you and while we are doing this our advice is to wait until we appoint a new supplier and do not switch in the meantime.
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“Any customer concerned about paying their energy bill should contact their supplier to access the range of support that is available."
This week, Ofgem boss Jonathan Brearley said tougher entry tests will be introduced for energy firms after more than two dozen companies have collapsed in the last three months.
Brearley also said that high gas prices are likely to remain in place for months.
"We have a retail sector that needs to become much, much more financially resilient. So we do need a retail sector that is more able to handle shocks like this in the future," he told lords on the Industry and Regulators Committee.
He added: "Not only is this a very fast and a very quick change in prices. I think this is going to be sustained, potentially.
"I don't know, I'm afraid nobody knows. There's huge uncertainty. But we have to plan for these prices being around for the coming months.
"As such, we do need a very, very different way of regulating the retail sector."
He also said that the regulator will need to reassess the price cap on energy bills. The price cap is currently set so low that energy suppliers are having to pay more for the gas they buy than the amount they can sell it for.
Energy prices have spiked globally due to a series of issues aligning around the world. Increased demand from a reopening economy has been paired with higher demand from China, and a summer that was less windy than normal.
Together these have helped push up the price of gas to a level where suppliers simply could not keep going.
More than three million other customers have seen their energy supplier fail this year.
