Reversing its earlier decision to freeze electrical rates for small customers, the District Commission has ruled that all electricity users must share the cost of a $5.8 million rate increase for Potomac Electric Power Co.

The turnabout means the average D.C. residential electric bill will increase by $5 a year rather than the 79 cents a year originally ordered.

The rate increase will go into effect as soon as Pepco receives written notice of the commision's decision, which was made Friday.

The $5-a-year raise will be the first since 1973 in the electric rates of small customers.

Two weeks ago the Public Service Commission issued a tentative order granting Pepco a $5.8 million raise, but freezing rates on the first 450 kilowatts of power used each month.

Because the average District of Columbia residential customer used only 500 kilowatts of power per month, that ruling meant only a tiny increase in the average bill of small customers and none at all for thousands of others.

The commission rejected most of Pepco's request then for $44.8 million rate increase by ruling that the power company cannot charge customers for new generating plants until they are completed and producing electricity.

At the time the commission said it found no justification for raising the rates of small customers.

After objections were filed by Pepco and many large electrical users, commision chairperson Elizabeth Hayes Patterson changed her mind.

When the final decision was made Friday, Patterson sided with Commisioner William Stratton, who favoured raising all rates equally. The third member of the regulatory board, Ruth Hankis-nesbitt, held out for continuing the six-year freeze on the rates of small users.

Patterson said yesterday she cast the deciding vote because "the record did not support" the freeze. She said she initially believed it was up to Pepco to prove that small user rates needed to be raised. Then, she said, she decided they would have to go up along with other rates opponents made a good case to the contrary. "The case wasn't made," she said.

D.C. People's Counsel Brian Lederer, who urged keeping down rates for small customers, said " $5 a year isn't going to kill anybody." But Lederer said it is large business customers suburban residents - who use more electricity than D.C. residents - who are forcing up electrical rates.

While large electrical users will benefit from the commission's decision, the 210 biggest Pepco customers face the prospect of paying a bigger share of Pepco's electric bill as a result of another tentative decision by the commission.

The utility commission tentatively decided the biggest customers must be charged time-of-day rates for their electricity - that is, paying more during daytime hours when electrical demand is high and less at night when demand is low.