The Georgia Public Service Commission Wednesday granted Atmos Energy a $3.4 million rate increase. The company had sought a $6.1 million hike.

Atmos, the major provider of natural gas service in the Gainesville area, was seeking to decouple its fixed costs from the cost of natural gas. Under the new rate structure, residential customers will see their monthly service charge increase from $7 to $10.50 while small business service charges jump from $12 to $16. The company had asked for service charges of $13 for residential and $20 for small business.

The case was heard by the commission at hearings in Atlanta and Gainesville, where the company offered a rebuttal to the public interest advocacy staff recommendation that Atmos receive a $2.18 million increase.

Under the proposal, which was approved on a 3-2 vote, Atmos will also raise the maximum income level for a senior citizen discount to $14,355, bringing Atmos in line with Atlanta Gas Light and Georgia Power Co.

Commissioners Bobby Baker and Angela Speir voted against the increase for Atmos.

Commissioner Stan Wise said the vote to raise rates in current times is not easy.

"It gave a little bit more certainty to the company that gas would be flowing on the coldest days of the year," Wise said. "Clearly, in tough economic times it’s hard to pass on even a $5 increase, but it would be harder to explain to a consumer that their utility is filing for bankruptcy and/or can’t serve."

Joel Ames, an Atmos spokesman, said the company would be reviewing Wednesday’s decision.

Under the PSC rules, the company can ask the commission to reconsider its action. Appeals from the commission are heard in Fulton County Superior Court.

The rate hike will take effect Sunday.

In 2005, the PSC rejected a request by Atmos for a $4 million rate increase in Georgia, giving the company only $445,000, or about 45 cents per customer per month. The increase sought by the company that year would have increased bills by $4.52 per month, according to the PSC.

Atmos serves 65,000 customers in Gainesville, Columbus and a portion of Jackson County.