State regulators ruled Friday that the state's two biggest utilities must immediately close a popular billing option to new customers because the programs encourage households to waste electricity.

The ruling didn't go as far as the state's attorney general and other critics had wanted when they asked the commission to discontinue the billing programs.

The decision by the N.C. Utilities Commission exempts more than 175,000 North Carolina households who are already signed up for the programs -- called "balanced billing" by Progress Energy and "fixed payment plan" by Duke Energy. The ruling lets the existing customers continue and also re-enroll for additional years when their annual contracts expire.

Nevertheless, the commission said its ruling spells a slow death for the billing programs, because the utilities won't be able to replace dropouts with fresh recruits.

The ruling "is tantamount to a phase-out of these two programs," the commission wrote.

Still, Progress Energy and Duke don't intend to shut down the programs, which are popular, profitable, have low turnover and can coast along indefinitely because of minimal annual attrition.

Progress Energy plans to accept applications postmarked through Friday, the date of the commission ruling. The Raleigh utility introduced its fixed payment plan in 2004, and it now has more than 62,000 residential customers signed up.

Since Duke's program started in 2002, only 4,000 customers have dropped out. Today Duke's program has nearly 114,000 participants, representing nearly 8 percent of the Charlotte utility's residential customers.

"The number of customers who drop off is very low compared to total enrollment," said Duke spokeswoman Paige Sheehan.

The Utilities Commission was divided by the case, with four commissioners voting to keep the program alive for current customers and three commissioners contending that the programs are wasteful and should be prohibited.

The billing options let customers pay a flat monthly fee for electricity, regardless of the amount of power used. According to filings with the commission, Duke's customers on the fixed payment plan increased household power use by 9.9 percent over three years, and Progress customers who used balanced billing used 8.6 percent more electricity over three years.

Those increases in power consumption convinced critics -- including the commission's consumer protection arm, the Public Staff -- that the billing options ran counter to the state's policy to encourage energy conservation.

Unaffected by Friday's ruling are utility customers on what are called "equal payment" plans. These billing options charge a flat rate for 11 months. For the final month of the cycle, the bill is adjusted, so that customers pay for actual power used during the year.

In the "balanced billing" by Progress Energy and "fixed payment plan" by Duke Energy, customers are generally guaranteed the same rate for 12 months.

An easy way for customers to tell which plan they're on: The equal payment plans do not charge a fee to participate.

The fixed payment plans, however, carry a fee of about 11 percent, which results in customers paying for the equivalent of about 13 months of electricity but receiving only 12 months of service.

The Utilities Commission agreed with the utilities' arguments that the voluntary programs are highly popular with the public, because they allow customers a measure of control over their monthly household budgeting.

But that logic didn't wash with some commissioners who wanted to go further and eliminate the programs.

"We do not believe that the programs' popularity, standing alone, transformed them from bad public policy into good public policy," Commissioners Lorinzo Joyner and Robert Owens Jr. wrote in a dissenting opinion.

A Durham group that had also urged repeal of the program, N.C. Waste Awareness and Reduction Network, is weighing whether to ask the commissioners to reconsider the case on environmental grounds.

Said N.C. WARN director Jim Warren: "There is so much wasted power involved, which could make the difference in building a nuclear plant or two."