Ovo Energy has been appointed by regulator Ofgem to take on supplying Economy Energy’s 235,000 domestic customers after the independent power supplier ceased trading earlier this week.
In a statement on its website, Ofgem said the appointment follows a competitive process run by the regulator to get the best deal possible for customers.
It pointed out that Ovo Energy is offering Economy Energy’s customers a competitive tariff and will honour all outstanding credit balances, including money owed to both existing and former customers.
Philippa Pickford, Ofgem’s director for future retail markets, said: “Ovo Energy has also agreed to absorb the costs of taking on these customers and outstanding credit balances, which means the extra costs will not fall on the industry or households.
“Ovo Energy will be in contact with customers over the coming days with further information. Once the transfer has been completed, customers can shop around for a better deal if they wish to.”
Economy Energy ceased trading on Tuesday, having entered a credit default on Monday - the ninth small UK power supplier within a year to fail - a move expected after Ofgem last week banned the independent firm from taking on new customers due to customer service issues.
Ofgem said it would appoint a new supplier for its Economy Energy’s customers.