ST. PAUL (AP) -- Minnesota regulators have approved an electric rate increase that's less than half of what Xcel Energy originally sought.

On a 4-0 vote, the state Utilities Commission Thursday approved a 2.7% rate increase for Xcel Energy's electricity customers in Minnesota.

Residential customers will get a refund because they had been paying higher interim rates. The refund amounts to about $30 for an average residential customer.

Xcel Energy says the average customer will see a $2 per month decrease beginning in May.

Regulators largely accepted an agreement reached last November between Minneapolis-based Xcel and business groups that intervened to oppose the larger increase.

The Minnesota Commerce Department did not oppose the settlement.

Xcel is allowed to increase its rates by $72.8 million over two years.

(Copyright 2011 by The Associated Press. All Rights Reserved.)