Oct. 29--Florida Public Utilities Co. has agreed to a $7.9 million increase in its base rates and charges after a proposed settlement reached with the Office of Public Counsel, the company and the OPC said Wednesday.

That's about $500,000 less than the $8.5 million increase the Florida Public Service Commission granted the West Palm Beach-based natural gas company in May, said Patricia Christensen, associate public counsel. In June, the Office of Public Counsel filed a protest on behalf of rate payers, saying the company had overstated its revenue requirements.

The new rates, based on the $8.5 million the PSC approved, took effect June 4 and increased the average monthly residential gas bill to $30.71 from $27.02.

George Bachman, FPU's chief financial officer, said Wednesday that refunds will be issued for any excess amount for all meter readings taken on or after June 4. The rate schedules and amount of refund for each classification of customer have not yet been determined, he said.

The company's original request, filed in December, was for a $9.9 million increase.

The PSC must approve the $7.9 million increase. Bachman said he anticipates the PSC will hear the matter by December, and schedules and refunds will be set then.

"We have proposed refunding the excess amount to customers over a period of time not to exceed six months. Of course, the timing of the refund is subject to the determination of the commission," Bachman said.

A week ago, FPU (AMEX: FPU, $12.66) shareholders and those of Chesapeake Utilities Corp. (NYSE: CPK, $30.50) of Dover, Del., approved a merger.

FPU becomes a wholly owned subsidiary of Chesapeake and the companies will operate in Florida under the FPU name.

Christensen said that because of the merger, another rate case for the combined company will be presented in two to three years. Chesapeake has a pending rate increase.

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