A state agency is recommending that less than half of a water company’s proposed rate increase be approved by state regulators.

Earlier this year, Indiana American Water Co. requested $46.8 million in new operating revenues, which would amount to an overall increase of 28.8 percent over current revenues to be paid for by customers from Northwest Indiana to Southern Indiana and including the Central Indiana communities of Franklin, Greenwood, Noblesville and Shelbyville.

The Indiana Office of Utility Consumer Counselor today recommended to limit the water company’s increase to $22.6 million, or 14 percent over current revenues, according to a news release.

The water company is seeking the increase in annual operating revenues because of higher operating and maintenance costs as well as numerous capital improvements to transmission and distribution systems throughout its Indiana service territories, according to testimony it filed with the Indiana Utility Regulatory Commission.

After reviewing testimony, the Utility Consumer Counselor, which represents taxpayer interests in cases before the commission, is recommending reductions in Indiana American Water’s requested increases for many of its proposed expenses and cost allocations.

“We recognize that the current economic situation may make it appropriate to delay certain capital improvements,” Indiana Utility Consumer Counselor David Stipple said in the release. “However, utilities must maintain and improve their infrastructure in a timely manner so to not put the safety and reliability of their distribution systems at risk.”

Indiana American Water provides service to about 283,000 residential, commercial and industrial customers in Indiana; its current base rates were approved in 2007.

Should state regulators approve the water company’s request, Franklin and Greenwood customers would see their bills jump from $29.59 a month to $40.84 a month, based on residential usage of about 5,200 gallons a month, according to the consumer advocate.

A technical evidentiary hearing, where Indiana American Water will be allowed to cross-examine witnesses of the Utility Consumer Counselor and other parties in the case, is scheduled for Dec. 15.