RALEIGH, N.C. — The state Utilities Commission voted to cut rates for PSNC and Piedmont Natural Gas customers by 12 percent, which will save customers an average of $20 on their heating bills starting next month.

"The heating season is not over, but for today, it's a decrease of significant proportion and that makes it a good day for us," said Jo Anne Sanford, chairwoman of the state Utilities Commission.

Officials said demand is down because of mild temperatures.

"We've been blessed with very, very good weather and the wholesale price has gone down," Sanford said.

The lower rates, however, still does not necessarily mean low. PSNC has raised rates three times since August. Even with Tuesday's cut, the rates are still more than a third higher than last year.

"We are higher than we were last year. We are higher than we were in June, but we are lower than a few weeks ago," Sanford said.

Earlier hikes were attributed to Hurricane Katrina and record high temperatures over the summer.