The Philadelphia Water Department announced Friday that a 17.5 percent rate increase would be phased in beginning Jan. 1.

When the last of three water and sewer rate hikes goes into effect July 1, 2014, the average customer's monthly bill will have risen by $10 - or $120 a year - from current rates.

The Water Department in February proposed a four-year, 28.5 percent rate hike that would have raised the average bill by $196 a year over current rates.

That proposal then entered a public-hearing process, with Community Legal Services (CLS) acting as a public advocate. The Water Department and CLS agreed on the 17.5 percent rate hike, which also was endorsed by the hearing officer.

Water Commissioner Howard Neukrug, who had the final say, called the settlement "a reasonable and thoughtful compromise."

In a news release, he said the increase would be used on infrastructure - the aging system has suffered several ruinous pipe breaks in recent months - and other programs to improve customer assistance, collections, and other functions.

This may be the last time a water-rate increase goes through this process. In November, voters approved a change to the City Charter to establish an independent rate-setting body.