Kansas Gas Service has agreed to impose a smaller rate increase on its customers, increasing bills by an average of $3.83 a month, state regulators announced Thursday.

The deal, which the company and state regulators finalized last week, still must be approved by the Kansas Corporation Commission, which said Thursday it will hold a hearing on the proposal next week.

Kansas Gas Service, which serves nearly 650,000 residential customers, submitted its periodic request for rate increases to the KCC this spring. The KCC, which regulates monopoly utilities, has heard testimony from the company, regulators and consumer advocates.

The company had originally asked for a two-tiered rate system based on customers’ gas usage. Customers using less than 73,000 cubic feet of gas would have seen a 10.41% increase, an average increase of $6.71 per month. Kansas Gas Service proposed a smaller rate increase of 8.25% for large customers. The company said this would result in an average increase of $9.48 in monthly bills for large users.

The agreement between KGS and regulators does not provide for the introduction of a second tariff tier, but rather an average increase of $3.83 for all customers.

The increases requested by KGS would have cost the company $58.1 million in customer bills annually. But KCC staff argued that the company could only justify a $31.7 million increase in customer rates. The Citizens’ Utility Ratepayer Board, which advocates for residential and small business customers, recommended only a $10.7 million increase in customer rates.

KGS spokeswoman Dawn Tripp said in a statement that the company was “committed to keeping rates as low as possible.”

“This request is necessary to recoup the investment needed to maintain a safe and reliable pipeline system,” Tripp said. “Thanks to consistent long-term investments, we have a 999% reliability rate, meaning our customers can rely on natural gas for their everyday needs, even in challenging weather.”

Commissioners will hear testimony on the proposed agreement at 10:30 a.m. Tuesday at the KCC office in Topeka. They can approve, reject or modify the agreement and must issue an order on natural gas prices by Oct. 25.