Centrica, the owner of British Gas, lost 224,000 residential customers in the first three months of the year as households switched to other providers.
The loss accounted for 1.5% of domestic customers, pushing down the number of residential accounts to 14.4 million.
British Gas remains the largest domestic supplier in the UK, but there are signs of more competition.
In its trading update, Centrica also said it had cut 800 roles as part of 3,000 job cuts planned for this year.
The energy firm said last year that it would cut 6,000 jobs, with half expected to go through redundancies, as part of a £750m, five-year savings plan.
The UK energy industry has a total of 39 suppliers. The major six suppliers - British Gas, SSE, Npower, Scottish Power, EDF and E.On - still account for 85% of all domestic energy accounts.
A recent report by the Competition and Markets Authority (CMA) found that 35% of customers had not considered switching suppliers.
It suggested various ways of encouraging competition, such as strengthening the ability of price comparison services to help consumers find the best deal.
Centrica said that customers coming to the end of their fixed deals and then moving on to other suppliers was the main reason for its loss of customers early in the year.
There appears to be no repeat of the shareholder revolt over executive pay seen at oil company BP a few days ago, ahead of Centrica's annual general meeting held on Monday.
Some 15% of the 72% of shareholders who voted before the meeting contested the £3m remuneration paid to Centrica chief executive Iain Conn in 2015.
Centrica reduced Mr Conn's pay from £3.7m in 2014, a reward that was rejected by a third of investors at last year's annual meeting.