Hawaii Kai residents will see their sewer bills go up 14 percent under a rate increase approved Monday by the Public Utilities Commission.

Hawaii American Water received approval from the PUC to raise monthly rates for owners of single-family homes to $67.08 from $58.70. The monthly rate for multifamily units will go to $57.08 from $49.95.

Hawaii American Water said it expects the new rates to go into effect late this year or early next year, said Lee Mansfield, general manager of Hawaii American Water.

The increase is smaller than the 20 percent sought by Hawaii American Water when it filed for the rate hike in February.

Hawaii American Water will collect an additional $1.25 million in revenue next year as a result of the increase. It had originally sought a $1.76 million revenue increase when it filed its application with the PUC. However, the PUC reduced the size of the request.

Hawaii American Water said the rate increase will help pay for major improvement projects, including $2.9 million for replacement of pressurized sewer pipes and $1.7 million for an upgrade of the company’s wastewater treatment plant near Sandy Beach.

The rate increase will bring Hawaii American Water’s total annual operating revenue to $10.03 million, up from $8.78 million previously. The revenue increase translates into an 8.1 percent return on investment for Hawaii American Water, up from 5.3 percent previously.

Hawaii American Water is a wholly owned subsidiary of American Water, which is based in New Jersey. The Hawaii Kai wastewater system was built in the 1960s by developer Henry J. Kaiser to provide sewer services for the community he was developing in East Oahu. American Water bought the system in 1998 from a Kaiser successor company.