FRANKLIN—The city has proposed increasing residential and business electric rates by 7 percent come Oct. 1.

Without the increase, the city would face a $748,205 shortfall, according to Interim Finance Director Sheila Minor.

The Franklin City Council on Monday voted 4-2 to have a public hearing on the proposal at 7 p.m. Monday, Aug. 8, at City Hall. Vice Mayor Raystine Johnson and Councilman Greg McLemore voted against the measure.

The average residential customer will pay $8 more a month, or $112, from June through September, and nearly $7.50 more a month the rest of the year. Small businesses will pay an average of $16.54 more a month or $112. Larger businesses will pay an average of $194 more a month, or $1,460. Churches and synagogues will not be affected.

The city buys its electricity from Dominion Virginia Power as a member of the Virginia Municipal Electric Association. The contract that went into effect on Jan. 1 included increased costs, which the city has been absorbing, said City Manager June Fleming.

“We tried to delay it as much as we could and not put the burden on the customers,” Fleming told the council. “We cannot do it anymore.”