Residential and commercial electricity rates are slated to decrease significantly next year, after the New York state Public Service Commission on Thursday signed off on two key changes.

One is eliminating what’s called the fixed Competitive Transition Charge, which was enacted as part of the Niagara Mohawk-National Grid merger in 1998 to even out costs Grid was absorbing. The charge was subsequently extended in 2002, but regulators deemed it unnecessary this time around.

National Grid said collecting the charge amounted to $573 million paid by customers in 2011.

According to a statement issued on behalf of the utility, the charge was meant to help in the recovery of Niagara Mohawk’s buy-out costs to end various federal and state-mandated power supply contracts. The charge was also meant to backfill losses on the sale of Niagara Mohawk’s generation assets.

“Although the charge was supposed to expire at the end of 2011, National Grid had initially proposed in January, 2010 to extend its collection beyond its expiration to maintain level bills. Through the rate filing examination process, the commission determined the company’s cost of service was lower and level rates could be provided in 2011 without the need to extend the collection of the charge,” the statement reads.

Another change authorized by the commission on Thursday allows the utility to recover $236 million in outstanding account balances, including up to $35 million related to costs associated with Hurricane Irene.

“The Commission and its staff worked diligently to provide this historic relief to National Grid ratepayers,” Commission Chairman Garry Brown said. “Not only were we able to freeze electric delivery rates for average residential customers in 2011, but residential customers will now see a sharp decrease in delivery rates next year. Furthermore, commercial and industrial customers will see unprecedented decreases in delivery rates, a welcome change that will have a positive economic impact across National Grid’s service territory.”

In terms of customers’ total bill, the decline is expected to average 6 percent for residential customers and up to 23 percent for some commercial and industrial customers.

After factoring in deferred expenses, National Grid’s 1.6 million upstate ratepayers, including 1.5 million residential customers, will see a total delivery rate decrease of approximately $429 million in 2012.

Several examples were provided to the News regarding the impact on various types of bills:

• A residential upstate customer using 500 kilowatts per month pays about $53 a month for delivery of electric service, or $80 including supply service. With the commission’s decision, such customers will see the delivery portion of their electric bill fall to about $46, or around $74 including supply service.

• A small non-demand commercial upstate National Grid customer using 500 kWh of electricity per month pays approximately $65 a month for delivery of electric service, or about $93 including supply service. With the commission’s decision, such customers will see the delivery portion of their electric bill fall to about $58, or around $86 including supply service.

• A small demand-metered commercial upstate National Grid customer using 60 kW per month pays approximately $1,180 a month for delivery of electric service, or about $2,110 including supply service. With the commission decision, such customers will see the delivery portion of their electric bill fall by approximately $270, or around $250 including supply service.

• A mid-sized industrial upstate National Grid customer using 750 kW per month pays approximately $20,000 a month for delivery of electric service, or about $37,380 including supply service. With the commission decision, such customers will see the delivery portion of their electric bill fall by approximately $8,560, or around $8,310 including supply service.

• A large industrial upstate National Grid customer using 4,000 kW per month pays approximately $54,400 a month for delivery of electric service, or about $139,400 including supply service. With the commission decision, such customers will see the delivery portion of their electric bill fall by approximately $22,700, or around $19,300 including supply service.