The Florida Public Service Commission has cut by nearly 40 percent of an annual revenue increase sought by Gulf Power Co.
The panel on Monday approved $64.1 million of the utility's request for $101.6 million.
The commission will hold another hearing on March 12 to set new rates for customers.
The Pensacola-based utility serves more than 431,000 homes, businesses and other customers in the western Florida Panhandle.
A key factor in the reduction was the commission's approval of a 10.25 percent return on equity. The company asked for 11.7 percent.
The commission also refused to include a new power plant site in the base rate because the need for such a facility hasn't yet been determined.
In addition, the panel cut executive incentive compensation by $3.9 million.