COLUMBUS — A Duke Energy Ohio electric rate plan that received state approval Tuesday should save business and residential consumers money by encouraging market competition in rates, Ohio regulators said.

The Public Utilities Commission of Ohio approved the plan, which will set electric rates for Duke customers from Jan. 1, 2012, through May 31, 2015. A total of 30 parties supported the rate plan, including advocates for residential consumers, large commercial and manufacturing customers, Duke and the city of Cincinnati.

The plan requires auctions to determine rates for electricity generation. The five auctions, starting in December, will involve competitive suppliers that are to bid for the right to supply electricity to Duke customers. Similar auction-based rate plans have saved customers money in other Ohio utility service areas, consumer advocates have said.

The subsequent auctions for Duke’s service territory will occur in May 2012, November 2012, May 2013 and November 2013. An independent bidding manager is to conduct the auctions. The resulting rates will be subject to PUCO approval.

PUCO officials said they anticipate that the December auction will result in a rate decrease beginning in January. The amount depends on the results of next month’s auction. Duke serves an area from the southern edge of Montgomery County south to the Ohio River.

The plan also requires Duke Energy Ohio to transfer all electricity generating assets to an affiliate by Dec. 31, 2014. That will make Duke a distribution-only utility.

Duke customers will be free to choose their own electric generation supplier or participate in aggregates of local communities that band together for power supply purchases.

Duke agreed to contribute $1 million annually from 2012 to 2014 for economic development in its service territory.

The company also committed to provide $100,000 for economic development and energy efficiency efforts by Ohio manufacturers and educate small- and medium-sized businesses about energy efficiency; $1 million annually from 2012 to 2014 for home weatherizing programs for low-income consumers, and $350,000 in 2012 to help customers at or below 200 percent of the government-determined poverty level pay their energy bills.