Electricity rates for Dalton Utilities residential customers will remain the same next year under a budget approved by the utility’s board on Wednesday. But electricity rates for industrial customers will rise 12 percent and rates for commercial customers will rise 11 percent.

Those new rates will take effect Jan. 1.

“The (board), recognizing the condition of many of our residential customers and the difficulty they are having with the (economic) downturn and the fact we did a significant residential rate increase last year, has decided they don’t want to do a residential rate increase this year on our electrical customers,” said Dalton Utilities president and CEO Don Cope.

The utility’s projected revenue from electricity this year is about $85 million. The projection for next year is $94.3 million.

The $186 million budget, up from a projected $166.8 million this year, does include 20 percent across-the-board increases for water and wastewater services.

The utility’s projected revenue for water services this year is $18.9 million, while the projection for next year is $22.7 million. The projected revenue for wastewater services this year is $20.2 million, while the projection for next year is $24.2 million.

Cope said the rate increases are because of the utility’s rising costs for producing and buying energy and related materials, as well as the increased costs of regulatory compliance.

Board member Lamar Hennon noted it is a difficult time to be putting together a budget and making economic forecasts, given the uncertainty surrounding the floorcovering industry, the area’s largest industry.

Cope agreed, but he added that the budget had been put together based on the best information available from local manufacturers.

Cope said that since 1997 the utility has subsidized rates by around $172 million from its investment income. That’s how much less than the cost of providing those services customers have paid.

“We can’t afford to do that anymore,” he said.

Officials at Shaw Industries and the Dalton-Whitfield Chamber of Commerce could not be reached immediately Wednesday afternoon.

Jim Bethel, CEO of floorcovering manufacturer J&J Industries, said he understands the board’s reasoning but worries about the effect the rate increases will have on local companies.

“I’m realistic enough to say the administration of the utility can probably clearly justify the dollars of this kind of increase. It just comes at an exceptionally unfortunate time for the industry,” he said.

The city of Dalton currently gets a transfer fee of 5 percent of gross revenues from Dalton Utilities, approximately $8 million this year.