Manitobans will be paying more for electricity as of June 1, but not quite as much as Manitoba Hydro was looking for.

The Crown utility had requested a rate increase of 3.5 per cent, but on Tuesday the Public Utilities Board said it had instead approved a rate increase of 2.5 per cent.

The new rate goes into effect June 1.

The increase does not apply to those who belong to First Nations On-Reserve Residential or Diesel Zone customer classes.

The Public Utilities Board said revenue from the rate increase will be set aside in an account to mitigate rate increases in the future.