Norwich — The city utilities commission unanimously approved a revised budget Tuesday, with major reductions to the heavily criticized rate increases proposed in March, praising Norwich Public Utilities administrators for making unprecedented changes to the budget and rates so late in the process.

The new combined electric, water, natural gas and sewer budgets total $92.6 million — a $3.2 million reduction from the original proposed 2018-19 combined budget but still a nearly $1 million increase over this year’s budget.

Proposed rate increases for all four divisions will be 63 percent to 51 percent lower than originally proposed before the budget reductions, which included delays in utility vehicle purchases, lower projected wholesale natural gas costs and an increase in the use of rate-stabilization revenues, NPU officials said.

Electric rates approved with the new budget will increase by 1.89 percent, water rates rising 3.53 percent, natural gas rates up 3.23 percent and sewer rates 3.09 percent.

The original proposed budget had rate increases of 5.4 percent for electricity, 8.6 percent for water, 9.1 percent for natural gas and 6.5 percent for sewer. The rates were strongly criticized by business owners during a public hearing, including by officials from Atlantic City Linen Supply, one of the largest utility customers.

NPU General Manager John Bilda said NPU will work with its largest commercial and industrial businesses to help stabilize their costs, declining to name specific companies. He said meetings already are taking place.

Commission member Robert Staley credited member Michael Goldblatt for expressing the concern that the utility “take a hard look at” the city’s largest commercial and industrial customers.

“The board and those customers can rest assured that we will work with them to make sure that they are successful doing business here in the city of Norwich,” Bilda said to the board, “and we have a track record of doing that."

Bilda said the budget adjustments included new projections for wholesale energy purchase costs totaling $3.5 million lower than earlier anticipated, with new Algonquin natural gas supplies coming online in November.

NPU also doubled the amount of rate-stabilization money being used to offset the electric rate increase from $2.3 million to $4.6 million. The rate-stabilization fund is NPU’s share of profits realized by the Connecticut Municipal Electric Energy Cooperative, owned by six municipally owned utilities. The money is held at CMEEC for use periodically by member utilities to offset rate increases.

NPU also reduced capital costs in the budget by delaying the purchase of a 6-ton excavator, a dump truck and a pickup truck for a combined total of $222,000.

Bilda said there were no staff reductions in the budget.

The lower rate increases will have a negative effect on city revenues in two years, NPU officials said. The city charter calls for NPU to turn over at least 10 percent of gross revenues to the city each year. Lower-than-anticipated rates mean lower gross revenues for the utility, Bilda said.

Mayor Peter Nystrom praised the commission and NPU management during public comment for taking a second look at the budget for what could be the first time, saying it reflects the reality of Norwich residents’ cost of living.

“I simply wanted to come and express that,” Nystrom said.

Board members also thanked utility management for adjusting the budget as requested. Chairwoman Grace Jones said the result is a compromise between cutting too much and risking safety and accommodating the concerns of customers.

c.bessette@theday.com