A recent decline in natural gas prices could result in lower electric bills for Princeton Electric Plant Board customers early next year.

Officials with the Tennessee Valley Authority, which supplies power to the Plant Board, announced a decrease in TVA’s fuel cost adjustment, effective Jan. 1.

Residential customers can expect a decrease ranging from about $4 to $8 on their monthly bills, according to a TVA statement released Thursday.

“We are glad for the relief this decrease will bring to rate payers across the Valley,” said TVA Chief Financial Officer Kim Greene.

“Recent reductions in purchased power and natural gas prices have helped reduce our actual costs and forecast for the second quarter of 2009.

“Unfortunately, coal prices remain significantly higher than they were a year ago, and sustained drought conditions across the Tennessee Valley have cut TVA’s hydro generation by more than 50 percent, preventing TVA’s fuel costs from dropping further.”

Economic conditions also led to a decrease in wholesale power sales, one of TVA’s most expensive power sources.

That decrease also helped lower the fuel cost adjustment, Greene said.

About 60 percent of TVA’s power supply comes from fossil fuels, primarily coal.

The decrease announced Thursday represents about a 6 percent reduction on total average wholesale rates.

TVA began using the fuel cost adjustment mechanism in October 2006, after Hurricanes Katrina and Rita led to a spike in fuel costs.

The adjustment can go up or down depending on quarterly increases or decreases in fuel costs.

A TVA rate increase of about 12 percent that took effect in April was followed by a 20 percent increase that took effect Oct. 1.

The Plant Board’s contract with TVA is set to expire in January 2010.