WASHINGTON (CBSDC/AP) — Pepco customers in D.C. will soon be paying higher rates.

The D.C. Public Service Commission approved the rate increase Wednesday afternoon. As a result, customers can expect to pay roughly $2.60 more each month.

Union workers at the Pepco utility company are also expected to vote on a contract proposal Wednesday.

The Washington Post reports the two sides haven’t been able to agree on a contract despite help from a mediator. The workers could go on strike if they reject the deal, or Pepco could lock them out.

It would be the first strike at Pepco since 1985, when union members walked out for five days.

Pepco spokeswoman Myra Oppel says the lockout “is not something we are considering.” But she said the company can nonetheless summon more than 400 contractors if necessary.

The main sticking point appears to be a proposed change to the workers’ health and welfare plans.

(TM and Copyright 2012 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)