The six big energy suppliers are said to have balances from closed accounts of at least £202 million from 3.5 million former domestic customers and £204 million from 300,000 former non-domestic customers.
The regulator called on the suppliers to do more to return the “unacceptably large amount of money” they are holding on to.
Andrew Wright, interim chief executive of Ofgem, said: “When many people are struggling to make ends meet, it is vital that energy companies do the right thing and do all they can to return this money and restore consumer trust.”
He added “decisive action” should be taken by the suppliers to return the money to the customers, while any money that cannot be returned should be use to benefit consumers more widely.
Ofgem also called on the suppliers to prevent the build up cash from happening again by being “crystal clear” with consumers about what to do when they are closing an account.
Richard Lloyd, executive director at consumer watchdog Which?, said: “If true, it’s shocking that some of the biggest energy companies are sitting on millions of pounds worth of consumer’s cash.
“Suppliers must return this money as soon as possible and be clear about what customers need to do when they close accounts.”
In a statement, Energy UK said the suppliers take “all reasonable steps to trace customers who leave a credit behind” but said the most common reason for the companies holding on to the funds was because the former customers provide no new contact details “so suppliers don’t know how, or to whom, they can return the money”.
The statement added that “more commonly energy companies are owed many times more money by people who leave unpaid debts behind them” than they hold in credits left by former customers.