ALBANY – The state Public Service Commission approved on Thursday compromise increases in electric and gas rates for Central Hudson, which had initially sought a much higher hike.

Beginning July 1, average monthly electric bills for Central Hudson’s residential customers will rise by $9.81 over three years and gas bills by $15.35 over three years under a joint proposal reached during negotiations between Central Hudson and parties to its rate increase case, including consumer and environmental organizations.

Monthly electric bills will increase by $1.46 the first year, $3.31 the second and $5.04 in the third year. Gas bills will also be subject to a phased-in increase, beginning with $2.54 the first year and rising by $5.59 and $7.22 for the second and third years.

Eligible low-income customers will receive monthly discounts totaling $31 million over three years, and Central Hudson will also reduce a fixed $24 monthly charge for electricity by $4.50 over three years and its $26 charge for gas by $1.75.

The proposal also calls for the elimination of fees for payments made by debit and credit cards and at walk-in locations and boost to energy-efficiency programs.

Central Hudson had initially sought a one-year $63.4 million increase in revenues from electric rates and a $22.2 million increase in gas revenues.

Under the compromise, Central Hudson’s revenues from electric would increase by $19.7 million the first year, $18.6 million the second and by $25 million in the third year. Gas revenues would also increase over the next three years, by $6.6 million, $6.7 million and $8.2 million.

“The progressive plan that was adopted — endorsed with complete stakeholder support by environmental groups, large business customers, and the largest municipality in the region — includes a nation-leading affordability policy that substantially lowers bills for most low-income customers,” PSC Chairman John Rhodes said.