Victory Energy Supply Ltd, run by Portsmouth City Council, has been shut down after accruing losses of £3.5m over the past couple of years.
The company was scrapped in 2018 when the previously Conservative Council, that set up the firm was ousted by the Liberal Democrats.
Since then, the energy firm has been continuing to run at a cost of £2k per month because the Council held out hopes that the company would be bought by a private investor.
The Council claim that no buyers came forward, although this is disputed by Conservative opposition who say that they had been made aware of offers from private investors.
The Council leader, Gerald Vernon-Jackson, said the Council were lucky to have not seen losses of up to £60m, like some other Councils had seen such as Nottingham City Council with Robin Hood Energy.
Council leader Gerald Vernon-Jackson said:
"I'm disappointed the council has been stuck paying money to keep the almost-lifeless body still going.
"No-one's wanted to touch it with a barge pole, we could not even get a tenner for it. We have to draw the line and say, 'that's it now'."
