The Kauai Board of Water Supply approved Friday a proposed 11.2 annual rate increase for about 20,000 customers through 2014.

The proposed rate hike will now go to the Small Business Regulatory Review Board for consideration. After the review, a public hearing will held before a final decision is made.

The new rates would fund the operation and maintenance of aging water lines, the agency said.

“There are in excess of $500 million of projects yet to be completed,” Department of Water Deputy Manager William Eddy said in a news release. The proposed rate increase would generate $4 million to $7 million a year over the next five years for cash funding of projects, he said.

The Board of Water Supply also approved a proposal to change the department’s billing cycle from bimonthly to monthly starting next year.