The Pennsylvania Public Utility Commission has approved a settlement that significantly reduces a gas rate increase requested by UGI Utilities’ Gas Division and prevents the company from seeking another base rate increase for more than two years.

Under the settlement, UGI will receive an additional $65 million in annual revenue, well below the $99.4 million increase the company originally requested.

The increase will be phased in over two years, with $40 million taking effect Oct. 1, 2026, and the remaining $25 million on Oct. 1, 2027.

For a typical residential customer using 68.8 Ccf of natural gas per month, the average monthly bill will increase by a total of $6.45, or 5.7%, rising from $113.76 to $120.21 over the two-year period. UGI had originally proposed a one-time increase of $9.91 per month that would have raised that bill to $123.55.

The settlement also scales back a proposed increase in UGI’s monthly customer charge. Instead of rising from $16.25 to $23 per month as requested by the company, the charge will increase to $19 this month and to $20 in October 2027.

In addition, UGI agreed not to file another base rate case before Jan. 15, 2029.

The agreement includes several measures aimed at assisting lower-income customers, including expanded enrollment in customer assistance programs, additional hardship funding, expanded payment and arrearage forgiveness options, and increased outreach to customers who may qualify for financial assistance.

The PUC approved the settlement on a 3-1 vote. UGI provides natural gas service to about 706,000 residential and business customers across 46 Pennsylvania counties. The commission held 12 public input hearings on the rate request earlier this year.