Despite falling natural gas costs, Vermont Gas is raising its rates after hashing out a deal with the state Department of Public Service, which represents customers.

The sides agreed to a settlement instead of arguing the case before the Public Utility Commission. The commission approved the terms of the deal October 25; the new rates go into effect November 1.

While natural gas costs are down about 2.4 percent, according to Vermont Gas spokesperson Beth Parent, the company's "base rate" is on the rise. That figure is controlled by state regulators and covers costs such as staff salaries, infrastructure and vehicles.

“Those [costs] are up about 3.9 percent,” Parent said.

The company's base rate is adjusted less frequently than gas rates because changes require specific approval from the Public Utility Commission. The increase this time around means the typical residential customer will pay about $1.75 more each month.

The Department of Public Service worked hard to keep the increase to a minimum, according to department lawyer Dan Burke.

“This was a pretty hard-fought case,” he said. “There were some fights on a whole bunch of different fronts.”

Burke said one major point of contention in the case was the company’s operation and management budget, which covers costs such as salaries and bonuses for employees. He credited the department’s negotiations with Vermont Gas for saving customers from paying about $700,000 towards that budget.

“For a company of Vermont Gas’ size, that’s a pretty good whack,” he said.

Parent said the company is satisfied with the settlement. The lower gas costs, she said, mean customers will see savings in the coming months compared to last year.

“Customers will pay $60 less this winter for their heating costs than they did last winter,” she said.