INDIANAPOLIS -- Indianapolis Water said Wednesday that cuts will have to be made if its full 35 percent rate hike isn't approved.

The Indiana Office of Utility Consumer Counselor, which represents consumer interests before state and federal bodies that regulate utilities, recommended on Tuesday that the Indiana Utility Regulatory Commission only approve a 21 percent increase for the utility.

The new figure would give the Indiana Department of Waterworks, $28.2 million in new annual operating revenues. But water officials contend millions of dollars in improvements are needed and that it is counting on the full $45.8 million, 6News' Derrik Thomas reported.

"We believe that we asked for what we needed, which is the 35 percent," said Executive Director Matthew Klein. "We look forward to talking with the consumer counselor about how we can reach an acceptable solution."

The IURC approved an 11 percent rate hike in the summer of 2008, after the company slipped into debt amid the recession.

The OUCC said the struggling economy influenced its decision to recommend a lower increase.

"We are extremely sensitive about rate increases. Families are trying to support themselves in many ways. Families are without jobs trying to make ends meet," said Indiana Utility Consumer Counselor David Stippler.

About 1 million customers are on Indianapolis Water's system

The utility will have the opportunity to file rebuttal testimony next month. Indianapolis Water officials did not indicate what may be cut if the full rate hike isn't approved.

The public is invited to weigh in on the issue during a hearing on April 19.