UK urged to consider energy market reforms to tackle fuel poverty

LONDON (Reuters) - The British government and energy regulator Ofgem should consider what market reforms are needed to help households struggling with rising bills and reduce the risk of fuel poverty this winter, a government advisory body said in a letter.

"There have clearly been consequences from market failures which have added significantly to bills," Caroline Flint, the chair of the Committee on Fuel Poverty, said in a letter to the government's business and energy department urging them to look at "what additional market reform measures may be needed now."

In Scotland, Wales and Northern Ireland fuel poverty is classified as spending more than 10% of your income on electricity and heating bills.

Households in England are considered to be fuel poor if their income left after heating their home is below the official poverty line and they live in a property with a low fuel poverty energy efficiency rating.

A senior executive at EDF Energy UK, Philippe Commaret, told the BBC on Tuesday that without further support from the government, more than half of UK households would be likely to be in fuel poverty in January.

The British cap on domestic energy prices is expected to rise to about 4,266 pounds ($5,017.67) a year in January, up about 230% on the year before, due to soaring wholesale costs.

Ofgem is due to make its next price cap announcement on Friday.

Flint also said the government should put in place a fuel poverty winter plan to ensure that consumers can seek advice and help, and should make sure every step is taken to prevent people reaching the point of turning off their heating over winter.

"We hope you will consider now whether more cash support is required and what other options and measures are available to reduce the pressure on bills," she said in the letter, sent earlier this month and published on Wednesday.

Wholesale energy prices in Britain hit a record high after Russia's invasion of Ukraine in February and have remained elevated despite falling back from their peak.

($1 = 0.8502 pounds)

(Reporting by Farouq Suleiman; Editing by Mark Porter)