PROVIDENCE — The city agency that is Rhode Island’s largest supplier of water has asked state regulators’ permission to increase its residential rates by 10.1 percent.

A typical customer would pay about $28 more a year, if that rate hike is approved.

However, the request by the Providence Water Supply Board, initially filed at the end of April, may be scaled back before a ruling by the Public Utilities Commission this fall, when the new rates would take effect.

Jeanne Brasil Bondarevskis, director of finance, said it now appears that the board will seek to reduce the requested increase to about 8.8 percent, mostly because its expenses are less than expected after this year’s settlement with the Town of Scituate over how much property tax it must pay the town each year. The board owns about 42 percent of the acreage in Scituate, the site of its reservoir system.

As more expenses become clear, Bondarevskis said, the request could be modified further.

Based on the expected amendment that proposes a rate hike of 8.8 percent, a typical consumer, who uses 74,805 gallons annually and now pays $276.32 per year would see his or her bill increase by about $24. Most customers are billed quarterly.

The increase would directly affect about 66,000 residential customers and 6,000 commercial customers in Providence, East Providence, Cranston, Warwick, North Providence, Johnston, Lincoln and Smithfield.

The Providence Water Supply board also sells water at wholesale rates to the Kent County Water Authority, the Greenville Water District, the East Smithfield Water District and the Bristol County Water Authority. In all, about 60 percent of Rhode Islanders get their water from the system.

The Providence Water Supply Board said in its filing that the wholesale water prices for its largest customers would jump 10.1 percent. About 40 percent of the 10.2 billion gallons the board sells is sold at wholesale. The authorities and districts that buy the water wholesale set the rates for their individual customers.

Providence Water’s last rate hike, a 13.6-percent increase, took effect November 2007.

Bondarevskis said the board, which has traditionally sought rate adjustments every two years, recognizes that this is not the best time to ask for more money.

“Of course no one wants to raise rates. The economy is terrible,” she said. “We’ve tried to put off some expenses and hold the line on some things.”

The $4.8 million that the increase would raise would be used primarily to make improvements to the treatment plant and replace old piping, particularly in the wake of an order by the Environmental Protection Agency requiring Providence Water to replace 7 percent of its lead pipes per year, at a cost of $3,735 per service.

At the end of March, 5,463 of its 27,000 services with lead piping had been replaced.

In written testimony presented with the PUC rate request, the board’s chief engineer and general manager, Pamela M. Marchand, said, “We are finding that many streets with lead services also require the replacement of the deteriorated water main. Most of these services were installed from 1900 to 1930.”

Any delay in the proposed increase “will just put these things into the future,” said Bondarevskis.

She said salaries and fringe benefits make up 2.3 percent of the requested increase.

In the wake of the Scituate agreement, the flat fee for service to a typical residence would go from the current $15.73 to $17.11, an 8.8-percent increase.

In addition, while water costs 0.29 cents per gallon, the revised proposal would increase that to 0.31 cents per gallon, also an 8.8-percent hike. Put another way, the same dollar that buys 351 gallons now would purchase 322 gallons if Providence Water’s rate hike is approved.

Fees for the 5,300 fire hydrants fed by Providence Water would increase by nearly 8.8 percent under the plan. That water is not metered, so municipalities and fire districts now pay a flat $291.06 per unit.

Other fees for things such as new water meter installations, shutoffs and fire hydrant flow testing would remain unchanged.

Public hearings are scheduled for Thursday night in the Providence Public Safety Complex auditorium at 325 Washington St.; Wednesday, July 8, at North Providence Town Hall, 2000 Smith St.; and Tuesday, July 14, at Western Hills Middle School, 400 Phenix Ave., Cranston. All begin at 6 p.m.

Groups objecting to the increase must file by July 31. The board is expected to revise its request, taking the Scituate settlement and other factors into consideration, by the end of August, said Bondarevskis.

The PUC will then hold another hearing on Oct. 13-14 at its headquarters, 89 Jefferson Blvd., in Warwick, at 9:30 a.m.

Its decision is expected by the end of November. Marchand said she hopes the new rates can go into effect Dec. 1.

gemery@projo.com