The regulator said the investigation will look at whether Utilita has been wrongly blocking customers from transferring to other energy suppliers, and whether Utilita has informed customers in writing as to why their request to transfer has been denied.
Uilitia was started in 2003 and supplies domestic customers across England and North Wales.
Ofgem said the investigation was launched in response to customer complaints and information provided by the company.
Utilita was not immediately available to comment.