For many Connecticut consumers, utilizing variable electric rate plans has turned out to be an awful experience. During hearings held by the Public Utilities Regulatory Authority (PURA) last year, customers testified about electric rates doubling from one month to the next without warning and often with no seeming connection to market forces.

Theoretically, these variable rate plans allow consumers to benefit when wholesale prices drop while exposing themselves to price spikes. But an analysis by the state Office of Consumer Counsel (OCC) found that the savings for the consumers during good market conditions are nominal, while the price jumps are often devastating.

Suppliers do not tie these variable rates to any economic index. That leaves consumers unable to assess past market fluctuations to determine if a variable rate plan is worth the risk. It is left to the suppliers to discern when market conditions justify a rate boost, using a process as ethereal as reading tea leaves in a steaming cup.

"We have seen customers pay much more than the standard service rate even in mild weather months, such as May and October, when the wholesale market is low," testified state Consumer Counsel Elin Swanson Katz during a hearing held last month by the General Assembly's Energy and Technology Committee. The standard rate refers to the price consumers pay by default in Connecticut if they do not choose a supplier.

"For example, research by OCC revealed that CL&P customers (using a variable rate plan) paid in the aggregate over $10 million more for electricity in September 2013 than they would have if they had remained on standard service," Ms. Katz testified.

Unless the industry can produce a clear standard against which the variable rate can be indexed, so that everyone knows the rules and the supplier cannot manipulate prices, we have to agree with those who say it is time to end the variable rate pricing for residential buyers in Connecticut. A bill that would do that is under consideration in the legislature.

Electric suppliers argue that having deregulated the electricity market in Connecticut in 1998 (a move that in our opinion has not worked out well for state consumers generally), the legislature should let the market dictate what products consumers purchase. If customers don't like the variable rate plans, they can opt for the standard price or fixed rates offered by other suppliers, goes that argument.

Ideally, free markets are the best choice to determine winners and losers. However, this product has proved damaging and unfair to consumers. There is ample precedent for prohibiting such products

The AARP wants variable rates prohibited because senior citizens have proved particularly vulnerable. Enticed by low teaser rates they hope will stretch fixed incomes, seniors find themselves in financial trouble when the rates spike, said John Erlingheuser, advocacy director for AARP Connecticut, during his testimony on Senate Bill 573. Others, he said, had fixed-rate contracts that expired and missed the fine print that said they were being moved into a variable rate arrangement.

Last year, the legislature approved a series of reforms aimed at trying to curb abuses in the variable rate market. Rates have to be fixed for three months before variability kicks in. An increase of 25 percent or more requires a 15-day notice. Suppliers were supposed to warn consumers in their electric bills what the rate will be the following month, but the consumer counsel said it hasn't happened.

The reforms have not worked, say consumer advocates. Unless the industry can supply the information on risks and rewards that is necessary for a healthy seller-buyer relationship, the General Assembly should remove variable pricing from the products available to residential consumers.