Consumer groups had criticized the settlement, negotiated between P.S.E.& G. and the State Division of the Ratepayer Advocate, as inadequate.

New Jersey's new rate increases were negotiated in a series of meetings by officials of the utilities board, the three companies and New Jersey's consumer watchdog agency, the Division of Ratepayer Advocate.

New Jersey's utility watchdog agency, the Division of the Ratepayer Advocate, criticized the proposed increases yesterday as excessive and asked instead that the utilities board approve an across-the-board increase of 17 percent for all four companies.

Blossom Peretz, the state's Ratepayer Advocate, said yesterday that new Federal rules requiring additional treatment of drinking water have forced many companies to raise rates in recent months, but the impact on consumers is not yet known.

She had few illusions about her reception when chosen nearly two years ago by Governor Whitman to be the first Ratepayer Advocate.

The division of the Ratepayer Advocate grew out of Governor Whitman's desire to move the state's dealings with utilities away from what had become a cycle of litigation in small ratepayer suits.

The board required the subsidy in exchange for the pay phone rate increase and for allowing the company to merge with Nynex, said Blossom A. Peretz, director of the State Division of the Ratepayer Advocate.

The California Legislature codified the Public Staff Division in Public Utilities Code Section 309.5, renaming it the Division of Ratepayer Advocates.

What the State Division of the Ratepayer Advocate, which protects consumers' rights, has called "one of the most ambitious changes in electric industry in the past 75 years" has gone largely unnoticed by its residents.

Seema Singh, the state's Ratepayer Advocate, said she also liked the notion of competition, though she, too, expressed concerns.