AUGUSTA — The Public Utilities Commission has approved a settlement between the city of Augusta and Central Maine Power Co. in a case in which officials alleged the utility company improperly used ratepayer resources for the benefit of its affiliate utility Maine Natural Gas.

In the settlement, approved by the current two-person utilities commission Tuesday, CMP agrees to make a one-time $95,000 payment to be used to reduce electricity delivery rates throughout its service territory and to not allow CMP officials to come along on sales calls for Maine Natural Gas. The ratepayer reduction would be paid using shareholder funds.

Under the settlement, CMP does not admit any violation of Maine law or utilities commission rules or regulations.

“We agreed to settle, in the form of a credit to customers, to avoid the added expense and distraction of continued litigation,” Gail Rice, a CMP spokeswoman, said Wednesday. “We value our relationship with the city of Augusta, and all parties agreed that making that payment, in the form of a credit to our customers, would be in our mutual best interest.”

The city had alleged, in a 10-person complaint filed with the utilities commission last year, that CMP President Sara Burns and other company officials participated in visits with Maine Natural Gas officials to businesses. They did that to help win customers for the gas utility by leveraging CMP’s “goodwill” in central Maine, the city alleged, saying CMP was essentially using ratepayer resources for the benefit of Maine Natural Gas.

CMP and Maine Natural Gas are both owned by parent company Iberdrola USA.

“We are pleased that this agreement recognizes that CMP violated PUC rules and a 1999 order by helping Maine Natural Gas generate business and that it creates a path for us to correct this issue and move forward,” the city’s attorney, Stephen Langsdorf, said in a news release. “We did not take this action lightly and look forward to resuming the city’s longstanding positive relationship with its largest employer and taxpayer.”

The Maine Office of the Public Advocate, which was also involved in the utilities commission case, has also endorsed the settlement.

Eric Bryant, senior counsel for the advocate’s office, said the settlement adequately resolves the issues raised in the case. He said the $95,000 to be paid by CMP to reduce distribution rates should have a minimal impact on customers’ individual bills, though CMP customers should see a reduction in their bills starting July 1, because of other rate cases being resolved.

Rice said CMP has about 610,000 customer accounts. Spread among those 610,000 accounts, the $95,000 payment would result in a one-time reduction in each individual customer’s bill of about 6.5 cents.

Utilities commission Chairman Mark Vannoy, in approving the settlement, said Tuesday that the “provisions resolve all the issues, they avoid further litigation in this case, and the outcome is reasonable and in the public interest.”