The New Jersey Board of Public Utilities and Public Service Electric & Gas have agreed to lower the return on equity for existing transmission services provided by PSE&G, federal approval of which could save Garden State ratepayers an average of $36 per year, or $140 million statewide in the first year of the deal.

The new rate, reduced from 11.18% to 9.90%, must get the final OK from the Federal Emergency Regulatory Commission, according to releases Wednesday from both NJBPU and PSE&G.

PSE&G said it will request that the rate change take effect Aug. 1. If FERC approves the request after that date, the utility company said customers would receive the full benefit retroactively.

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NJBPU, meanwhile, estimated the new rates could take effect in September.

Overall, PSE&G said, the typical residential customer would see rates reduced by 3%, or an average of $3 per month.

As part of the agreement, NJBPU would not be able to request further reductions for the next three years.

Patrick Lavery is New Jersey 101.5's afternoon news anchor. Follow him on Twitter @plavery1015 or email patrick.lavery@townsquaremedia.com.

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