Ohio utility regulators gave the nod to a new rate plan for American Electric Power customers on August 8, which made the increase smaller than the initial proposal called for, The Columbus Dispatch reports.

According to the news source, both residential and business customers will see their electricity rates rise by as much as 7 percent when the three-year plan is phased in. After the first year, the rates will not be set in concrete, except for a stipulation that keeps any increase from exceeding 12 percent during the three-year period.

The ruling comes after a year and a half of hearings over the rates AEP customers should pay.

"Today’s order leads us towards more robust competition in the state of Ohio in less than three years," said Todd Snitchler, chairman of the PUCO. "It also provides mechanisms for consumer protection, and maintains that AEP Ohio continues to provide adequate, safe, and reliable service to its customers."

Ohio utilities and retail energy providers have been butting heads for months now, as AEP has accused independent providers of encroaching too deep into their territory, despite the state's energy deregulation laws.