In 1988, the settlement calls for a rate freeze, and in 1989 rates would increase by 4.5 percent.

A rate freeze would protect this saving for at least two years.

Under the agreement, Frontier's customers also received an 11 percent rate reduction and a rate freeze through 2001.

Since April, cable operators have been subject to a separate rate freeze.

Last month the utility filed for a 13 percent rate increase to go into effect after the rate freeze expires.

Susan Halpin, a spokeswoman, said the new spending level was required by a proposal for a rate freeze, because "conservation costs money."

Others were resigned, saying that the rate freeze for Citizens customers was at least something positive.

Mr. Serio said the administration decided against a rate freeze because it is more interested in long-term reductions.

The Mayor also announced cost-saving moves to help pay for the rate freeze.

"With debt increases of this magnitude, the rate freeze is simply an illusion," he said.