Peco on Tuesday agreed to boost electric bills for the average residential customer by $1.27 per month on Jan. 1, about a third the amount that the utility initially requested in March. In addition, Peco will give each residential customer a one-time credit of about $30 to reflect the lower taxes it paid this year under the 2017 Tax Cuts and Jobs Act.

Peco on Tuesday filed a settlement petition with the Pennsylvania Public Utility Commission, and estimated that bills for a residential customer using 700 kilowatt hours per month would increase 1.2 percent, from $102.65 to $103.92. Peco had initially sought a bill increase of about 3.2 percent.

A typical small business customer can expect to pay about $2.96 more per month, and will receive a one-time bill credit of $126 in January to reflect Peco's lower tax rate.

The Philadelphia utility, which serves 1.6 million electric customers in Southeastern Pennsylvania, will pay about $71 million less per year in federal taxes.