New Jersey regulators on Monday approved an electric rate increase for Public Service Electric and Gas Co. - and then wiped out most of the increase for two years by ordering the utility to refund overcharges from 1999 to 2003.

The Board of Public Utilities granted PSE&G a rate increase of $73.5 million, which would increase the average bill for a residential customer by about $12 a year, or 0.9 percent. But the BPU also ordered the $122 million refund to be paid back over two years, which would reduce the increase to $1 a year. PSE&G is New Jersey's largest utility.

"This represents a great win for ratepayers," said Stefanie A. Brand, director of the Division of Rate Counsel, which had argued for the refund.