New York State Electric & Gas Corp. is slashing the size of the rate increase it is seeking from its electric customers by more than 40 percent, the utility said Thursday.

NYSEG, which last September requested a rate hike that would have boosted a typical residential customer’s electric bill by a total of almost 19 percent, or $12.39 per month, said it is reducing that proposed increase to $6.70 per month.

Exactly how big of a rate increase customers will end up paying will be decided by the State Public Service Commission late this summer. NYSEG provides service to about 175,000 customers in suburban and rural portions of Western New York.

The commission’s staff is recommending that NYSEG’s electric rates be reduced by $18.4 million, although other factors that affect bills would still result in a typical residential customer’s electric bill rising by 3.3 percent, or $2.18 per month.

NYSEG, which has not raised the rates it charges to deliver electricity to its customers homes and businesses in more than a decade, has said the higher rates are needed to meet the rising cost of providing reliable service and to make needed improvements to its infrastructure.

The company, which provides natural gas service to a small number of customers in the region, also is slashing the size of the rate increase it is seeking for natural gas customers.

NYSEG, which had been seeking an increase that originally would have driven up a typical customer’s gas bill by more than 17 percent, or $25.34 per month, has trimmed that request to $12.47 per month. The PSC staff has recommended that NYSEG hold its natural gas rates steady.

The reduction in the size of NYSEG’s proposed rate increase came as the Public Service Commission on Thursday held a sparsely attended public hearing in Lancaster.

Unlike a hearing Wednesday in Elmira that drew more than 100 people, the Lancaster hearing was attended by just 14 consumers, who mainly had questions for the administrative law judge conducting the hearing, rather than comments about the proposed increase in rates.

Kathy Van Aernan, a single mother from Lancaster, said the proposed increase would put a big strain on family budgets and suggested that any rate increases be spread out over several years, rather than taking place all at once.

“To me, that’s a lot of money per month,” she said. “I don’t know why they couldn’t do it a little bit at a time.”

Lancaster resident Shirley Scherlein said the timing of the rate increase, which would take effect in late September if approved, was unfortunate, especially with many people and businesses still feeling the sting of the recession.

“Why couldn’t these utilities wait another year until people get back on their feet?” she asked.

The proposed rate increases cover the cost of delivering the electricity and natural gas to homes and businesses, as well as the company’s profit. NYSEG sells the actual electricity and natural gas to customers at its cost.