Together Energy, which is co-owned by Warrington Borough Council and has around 176,000 customers, has ceased trading.
The Scotland-headquartered business, includes its subsidiary Bristol Energy, also supplied one non-domestic customer.
Warrington Borough Council first began its partnership with Together Energy in September 2019, with an £18m investment.
READ MORE: Revenue passes £2bn at Matthew Moulding's THG but profit margins to miss market expectations
In November 2021 the Scotland-headquartered business said it was looking to secure "long-term funding for growth" as it aims to return to profitability.
Earlier this month, Warrington Council refused to comment on reports the company could be set to collapse.
An Ofgem statement said: "Under Ofgem’s safety net, customers’ energy supply will continue and funds that domestic customers have paid into their accounts will be protected, where they are in credit.
"Domestic customers will also be protected by the energy price cap when being switched to a new supplier.
Most Read
"Customers of Together Energy Retail will be contacted by their new supplier, which will be chosen by Ofgem.
"In recent weeks there has been an unprecedented increase in global gas prices which is putting financial pressure on suppliers.
"Ofgem is working closely with government and industry to make sure customers continue to be protected this winter."
Neil Lawrence, director of retail at Ofgem, added: "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.
"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. 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 tariff.
"Any customer concerned about paying their energy bill should contact their supplier to access the range of support that is available."