The energy market needs urgent reform as households face significant price rises in the near future, according to MPs.
The Commons business and enterprise committee said the government needs to undertake a "fundamental rethink" of its fuel poverty policy.
The MPs said they had found no evidence of collusion between the six biggest energy companies - British Gas, E.On, Scottish Power, Scottish & Southern, EDF, and Npower.
But it said there were "very real problems" with the market.
Chairman Peter Luff said: "Just because we have found no evidence of collusion does not mean we have given the big six energy companies a clean bill of health - far from it.
"It is clear that there are very real problems in the energy markets at all levels, and going beyond those six companies, which need to be addressed.
"Some of these are strategic issues, such as the functioning of the wholesale markets, while others are more specific concerns, for example, how suppliers conduct their doorstep sales to encourage switching."
The committee's report, published on Monday, predicted that domestic gas and electricity bills would rise significantly in the near future.
But it raised concerns that fuel poverty programmes had failed to help most of those who were struggling.
"Energy suppliers' existing social assistance initiatives (which go well beyond specific tariffs) do not reach the vast majority of the fuel-poor," the report said.
"They also vary widely, confusing consumers and providing inconsistent coverage. Irrespective of its broader conclusions on the role of such tariffs, we believe the government should define the criteria for both the prices charged by suppliers under the banner of social tariffs, and for identifying those customers that qualify for them."
The report warned the competitiveness of the UK economy was at risk if industrial consumers were forced to continue paying prices above European levels.
The government had not responded quickly enough to the UK's increasing dependence on gas imports by encouraging investment in storage, the committee said.
It also called on regulator Ofgem to introduce price controls if suppliers failed to narrow the price gap between direct debit tariffs and standard credit and prepayment meters.
However energy minister Malcolm Wicks claimed that there had been a lot of "foresight" by the government and that "things are changing in the right direction".
He pointed to government policies on energy including the decision taken this year that Britain should have a new generation of civil nuclear reactors which he described as "a historical decision".
"We have said that 15 per cent of all of our energy by 2020 should come from renewables – a tenfold increase," he said.
"If these are not big decisions by a government concerned with the future, I don’t know what is," he added.
But Wicks refused to answer on whether the government would consider a windfall tax, which would top-slice the profits from the European Emissions Trading scheme.
"The rather boring answer that I have to give is that matters of taxation are for the chancellor and the Treasury, not for me," he told the BBC Radio Four Today programme.
"I would point out that we have already successfully negotiated with six supply companies to increase the amount they spend on the social tariff.
"That is going up from £50m to £150m to focus help on low-income groups, including the elderly."
Stakeholder response: Age Concern
Gordon Lishman, director general of Age Concern, said: "This report is yet another nail in the coffin for the government's fuel poverty strategy. With more than one-in-three pensioner households likely to be in fuel poverty by the end of the year, the government and energy companies are clearly failing to protect older people from the impact of price hikes.
"Wide-ranging reforms and an urgent revision of the government’s fuel poverty strategy are needed to help tackle escalating fuel poverty levels. As an emergency measure the government and energy companies must work together to introduce a 'fuel voucher' scheme to help the poorest pensioners.
"Social tariffs are key to helping the poorest customers. Although Ofgem have now announced guidelines on social tariffs, this won't help the poorest pensioners unless it is mandatory for energy companies to offer social tariffs at the cheapest rates."
Stakeholder response: Help the Aged
Mervyn Kohler, special adviser for Help the Aged, said: "This very robust report makes trenchant and welcome comments about the disconnection between the current performance of the market and the dismal collapse of the government's strategy to eradicate fuel poverty.
"The select committee has fired some well-aimed bullets at government, the regulator, and the industry, and its report demands a timely and positive response.
"The continued rise of fuel prices and its impact on fuel poverty has been treated by government with hand-wringing resignation and complacency. The government must urgently reinvest in Warm Front and improve the housing stock of the fuel poor – to reduce both energy bills and carbon emissions.
"When it comes to payment options there is some hope for progress. Guidance from Ofgem designed to demystify social tariffs could make things easier for vulnerable and fuel-poor customers. Older people make up half the fuel-poor and for their sake, government and the industry must take action."
Stakeholder response: National Insulation Association
John Mason, head of policy and communications, said: "The NIA represents the manufacturers and installers of insulation products including cavity wall insulation, loft insulation and other innovative products. We welcome the call for more activity to mitigate the effect of high energy prices on low income users and specifically the fuel poor.
"As an industry we support any work carried out to help eradicate fuel poverty and ensure those on low incomes can afford to properly heat their home. However, the only way to ensure all those on low incomes benefit from a thermally efficient home is to insulate and ‘fuel poverty proof’ all of the housing stock. This means that where a low income householder moves property we can be ensured that they will not suffer from fuel poverty.
"The most important measures in terms of GB energy/carbon savings potential in the existing stock which must be addressed are:
• Insulating around 9 million existing properties with unfilled cavity walls.
• Increasing the thickness of existing loft insulation in the 13 million homes with 100mm or less of loft insulation to thicknesses required for modern new dwellings (270mm).
• Improving the insulation of the 7-8 million solid wall properties.
"There are four key areas which we believe would benefit from additional activity and funding:
"An area of concern is loft top-ups of which there are around 13 million with 100mm or less of loft insulation (compared to modern standards of 270mm), with almost half of all GB homes having insufficient levels of loft insulation. Therefore, it would be beneficial to encourage more activity in relation to this measure.
"Allowing suppliers to cover the costs of Warm Front grant top-ups. The grant maxima mean that around 14% of all vulnerable customers receiving a Warm Front grant cannot benefit from all available measures; this especially affects loft top ups. The costs of ensuring all the 30,000 householders this affects each year can have their loft topped up would be around £10 million and every encouragement should be given to energy suppliers to fill this gap. This would ensure that the key fuel poverty programme is far more effective with the resultant reductions in the numbers suffering from fuel poverty.
"Further interventions in the Private Rented Sector to incentivise landlords to have insulation measures installed. At present only a small proportion of funding and measures are targeted and reach the private rented sector despite the fact that householders in this tenure have a far higher propensity to be fuel poor than any other - 8.4% in fuel poverty v 5.9% across the housing stock as a whole. Focused funding on additional activity to increase the uptake of insulation measures in the private rented sector should be allowed to qualify.
"Nearly half of all fuel poor (47.6%) live in ‘hard-to-treat’ properties which rarely receive any assistance form CERT or fuel poverty programmes such as Warm Front. Therefore encouragement to install solid wall insulation is necessary if fuel poverty is to be eradicated for such householders."
