Gainesville Regional Utilities will bump up its electric rates for the upcoming fiscal year, according to its latest budget proposal.

General Manager Ed Bielarski said GRU customers will see a 2 percent increase on bills beginning Oct. 1. It is the first time since 2012 that GRU’s electric customers will see a base-rate increase, he said.

City commissioners are likely to give tentative approval to GRU's proposed budget July 18 and then approve it Sept. 21.

The city-owned utility's annual revenue is approximately $448 million.

GRU officials plan to raise the utility's fuel adjustment charges from 7 percent to 7.5 percent per kilowatt, a result of increased natural gas prices, Bielarski said.

The increases are largely due to GRU modernizing its technology, he said.

“Part of that cost is some of the maintenance we’re doing on some of our older units,” he said. “We’re trying to become a 21st century utility.”

There will be no changes in customers' water, wastewater or natural gas rates, he added.

GRU officials have hinted at a coming 2 percent rate increase during discussions about buying the Gainesville Renewable Energy Center. Rates are also expected to rise 2 percent more in 2019 and 2020, according to GRU, and could rise 3 percent in both 2021 and 2022.

Bielarski said the $750 million buyout, which would eliminate the city's $2.1 billion obligation to GREC for available energy, could offset the increases.

Contact reporter Andrew Caplan at andrew.caplan@gvillesun.com or on Twitter @AACaplan.