Ofgem has ordered EDF Energy to pay £3 million to "vulnerable customers" after the watchdog found failures in how the firm handled complaints.
An investigation into the firm was launched after it saw a 30% increase in complaints following the introduction of a new IT system in 2011.
It found that the company did not have the proper procedures in place to receive, record and process customer complaints in accordance with Ofgem's complaints handling rules.
On top of this, EDF Energy encountered a number of unexpected technical problems that resulted in customers experiencing high call waiting times, with many hanging up before they got through to an operator.
Sarah Harrison, Ofgem's senior partner with responsibility for enforcement, said: "It's now vital for EDF Energy and the industry as a whole to truly put customers first and put adequate resources in place to deal with complaints.
"Following our reforms, it has never been easier for consumers to switch supplier and therefore those unhappy with the service they receive are able to vote with their feet."
Beatrice Bigois, EDF Energy's managing director of customers, said the company took action quickly, suspending the transfer of customer accounts in the new system, while hundreds of additional staff were recruited to improve service levels.
She said: "Despite our best efforts and extensive planning to manage this transition in 2011 without impacting our customers, we recognise that for a period of time the service to our customers was not up to the standards they deserve. We apologise to those customers who were impacted during this period.
"We have cooperated fully with Ofgem and have taken this matter very seriously."
The £3 million will go to a Citizens Advice scheme called Best Deal Extra and its debt helpline. Earlier this year, Ofgem formally referred the energy market to the Competition and Markets Authority, beginning an investigation into the energy firms' practices that will take around 18 months to complete.