Utah's Public Service Commission has ordered US WEST Communications, formerly Mountain Bell, to reduce the average monthly phone bill about $1.50 after the first of next year, the agency said.

The 10.5 percent reduction, which will lop off $27 million in revenues for US WEST, will occur in two phases with a $16 million reduction effective immediately and $11 million more after Jan. 1.Regulators arrived at the two totals based on excess profits the phone utility has earned since Aug. 1, and project profits US WEST expects to earn before the first of the year.

US WEST had been earning in excess of its PSC authorized profit level for months and was put on notice last summer that rates may have to be reduced as a means of returning excess earnings to ratepayers.

The phone utility had negotiated a settlement, pending PSC approval, with regulators to reduce rates by $31 million and let future excess earnings be split 50-50 between customers and the company. In ordering the $27 million reduction, however, the commission also rejected the proposed settlement.

A full rate case on US WEST's rates is scheduled for January.