WARWICK –– The bad news is that the Public Utilities Commission yesterday approved an increase in how much money National Grid can charge customers to maintain its natural gas network in Rhode Island.

The good news is the PUC also approved a reduction in the rate charged for the gas itself, reflecting the falling market price of natural gas.

So what’s the net impact on a customer’s bill?

The regulators and the company both said yesterday that they don’t know yet, because of the complexity of the decisions the PUC made yesterday. The three-member panel allowed many charges the company was seeking, and disallowed others.

But what is known is this: the approved reduction in gas rates, by itself, would have reduced a typical customer’s gas bill by about 8.3 percent. That will be offset by the distribution rate increase allowed by the PUC. National Grid had been seeking about $20 million in extra annual revenue, which would have added 5 percent to a typical customer’s bill. But since the PUC disallowed some of the extra expenses the company sought, the distribution rate increase will be somewhat less than the 5 percent.

That means that National Grid’s 244,000 natural-gas customers should be in for a net rate reduction of at least 3.3 percent.

National Grid said yesterday afternoon that it is “running the numbers” and will make a filing tomorrow that shows the net impact on a typical customer.

The new rates are scheduled to go into effect Dec. 1.

Yesterday’s decisions were about two different parts of the natural gas bill: the charge for natural gas, and the cost of delivering that gas.

The gas charge is fairly straightforward. National Grid buys gas on behalf of its customers and passes on those costs, dollar for dollar, without markup. Since the market price of natural gas has been falling, the company was required to lower its gas rates.

Determining the distribution rate will be much more complicated. In April, National Grid started the process by proposing that it be allowed to raise distribution rates, which cover the cost of operating its gas network, as well as the overall cost of doing business, including salaries and profits.

The company filed volumes of materials to back up its claims that its cost of doing business had risen, and that it was due for a distribution-rate increase. The last time these rates went up was in 2002.

The Division of Public Utilities and Carriers, the agency that represents ratepayers in these cases, hired its own experts and pored through the filing, agreeing or disagreeing with the company’s various figures. In addition, public hearings were held and the company and the DPUC presented their cases before the PUC, in a trial-like fashion.

The culmination of that process was yesterday’s votes by the PUC. The commission broke up the distribution rate increase proposal into 25 different issues, and voted on each one.

Here are some of the key decisions the PUC made:

•The PUC rejected the company’s proposal of “revenue decoupling,” which would have protected the company from revenue shortfalls if customers used less gas than what had been anticipated. The measure had been supported by environmental groups, such as the Conservation Law Foundation. The company argued that under the current rate structure, National Grid is penalized when customers conserve energy, and therefore has no incentive to promote energy conservation. Chairman Elia Germani was joined by Commissioner Mary Bray in voting against it, saying it’s not clear that revenue decoupling actually leads to more energy conservation. “There’s not enough evidence that proves this is beneficial to ratepayers,” Bray said. Commissioner Robert Holbrook disagreed, and voted for it.

•The PUC unanimously rejected National Grid’s proposal to charge customers for a $1.4-million marketing program designed to encourage oil-heat customers to switch to natural gas. They cited an opinion by Attorney General Patrick C. Lynch, who said that state law prohibits utility companies from charging customers for advertising expenses.

•The PUC approved, 2 to 1, a low-income discount of 10 percent off the cost of distribution charges for customers who meet certain income requirements. That amounts to roughly a 3-percent discount off a typical heating customer’s bill. All ratepayers will pay for the discount, estimated to cost $830,000. Holbrook voted against the discount “on principle.” He said that bureaucrats, such as the PUC commissioners, should not be implementing what is effectively a new tax on customers. Instead, that’s the role of the legislature, he said.

•The PUC allowed the company to raise the customer charge by $3 to $12 a month. At the same time, the company will be required to reduce distribution rates by $3 a month for a typical customer, making it a wash. This will benefit those who use more gas than the typical customer (922 therms per year) and will shift more of the costs of operating the gas network to customers who use less than the typical amount.

•The PUC set the company’s allowable “return on equity” –– a way of calculating profits –– at 10.5 percent. The company had been seeking 11.5 percent.

•The PUC approved the company’s proposal to speed up the replacement of aging gas pipelines and mains by spending a total of $25 million on capital improvements, an increase of $12 million from its current spending.

•The PUC allowed National Grid to charge customers all the costs of preparing and presenting this rate proceeding. The costs were $884,000 for the company, $113,000 for the DPUC, and $351,000 for the PUC, totaling $1.3 million. Customers will pay that cost spread out over the next three years.

tbarmann@projo.com