The regulator will now choose a new supplier to take on the energy company’s customers, which includes around 108,000 domestic and 21,000 business customers, who will continued to be supplied energy as normal.
Extra Energy topped Citizens Advice’s complaints list last year, receiving 2.05 stars out of five for the period between January to March.
Customers are being advised not to switch suppliers yet and to take a meter reading, ready for when their new energy provider contacts them.
That will help make the process of transferring customers and paying back any outstanding credit balances as smooth as possible.
Customers can ask their new supplier to put them on the cheapest deal or shop around for a better deal – they won’t be charged any exit fees.
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. We will also ensure that domestic customers’ credit balances are 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 continue to 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.”
The news comes as the regulator has proposed financial and customer service tests for new energy suppliers wishing to enter the market.