Natural gas isn't going to be as expensive for National Fuel customers but basic service costs will rise, the company said Friday.

Effective today gas rates will be cut by 3.1 percent. The company said that means the monthly bill for a typical National Fuel Gas Distribution Corp. residential customer will fall to $104.64 from the previous $107.99.

"This decrease is the direct result of recent decreases in the market price of natural gas,'' said Nancy Taylor, senior manager of corporate communications for National Fuel. "Despite earlier predictions of a nationwide increase in gas costs, the price has actually gone down.''

But the utility also said it reached a settlement regarding basic service costs. Under the settlement, which awaits final approval from the Public Utility Commission, service fees would rise 1.34 percent effective January 15. Basic service costs are what the utility pays to deliver gas to customers which includes employee wages, pipelines, materials and other expenses.

"This will be the first time since 1995 that National Fuel increased rates related to the cost of providing service to our customers,'' Ms. Taylor said. She said the settlement rate is lower than what the company originally requested.

National Fuel serves about 214,000 customers in 14 Northwestern Pennsylvania counties.