The New York State Public Service Commission approved a rateplan yesterday for National Fuel Gas Distribution that will cut itsresidential and commercial rates by $20.4 million in two phasesover the next two years. Not only will customers enjoy lower rates,but the company will have to attain specific service qualitytargets for its customers or face penalties, said PSC ChairmanMaureen O. Helmer.

The two-year term plan will cut rates by $10.2 million (1.6%)this month, and shave another $10.2 million next October. Eachyear’s reduction is composed of two elements: a base rate reductionof $7.2 million and $3 million in credits on customers bills toreturn NFG’s excess earnings. Each of the $10.2 million billreductions will provide $16 a year in savings for a typicalresidential heating customer using about 120 Mcf of gas per year.NYPSC said the plan recognizes the gas industry restructuring planit outlined Oct. 7, and NFG has expressed intentions to furtheradvance unbundling in its territory by the end of the two-yearterm.

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