RICHMOND, Va. — Allegheny Energy Inc. says Virginia regulators have approved an agreement that reduces the utility's proposed rate increase by $3.2 million.

Allegheny had asked the Virginia State Corporation Commission in April to approve a $19.4 million rate hike to help the utility recover the cost of purchased power.

Allegheny's original proposal would have increased the monthly bill for a residential customer using 1,000 kilowatt-hours of power by $5.47 to $96. Allegheny said Wednesday that the agreement reduces that increase to $94 a month.

Greensburg, Pa.-based Allegheny serves about 102,000 customers in Virginia.