Average Athens Utilities residential customers will see a $6.50 drop in their electric bills after Jan. 1.

After slamming customers with a 20-percent electric rate hike in October, the Tennessee Valley Authority announced Thursday it will cut electric rates by 6 percent beginning Jan. 1 to account for lower fuel costs.

The average Athens Utilities electric customer - who uses 1300-kilowatt hours per month - will see a $6.50 decrease in his or her monthly bill, said Athens Utilities Electric Department Manager Gary Scroggins. It will show up on the February bill.

The 20-percent rate hike that began Oct. 1 was the federal utility’s highest rate increase in three decades and blamed largely on rising fuel costs for its power plants and power purchased from others, according to the Associated Press.

The reduction of rates reflects a 25-percent reduction in the federal utility’s fuel cost charge, which is adjusted quarterly, the AP said.

“TVA uses a great amount of coal to run generators to produce the electricity and, to a lesser extent, natural gas generators to generate electricity,” Scroggins explained.

Even with reduction announced Thursday, TVA customers will still pay rates 14 percent higher than before October.

TVA says the upcoming reduction should translate into a $4 to $8 a month savings for the 8.8 million residential consumers receiving TVA electricity in Tennessee, Kentucky, Alabama, Mississippi, Georgia, North Carolina and Virginia, the AP said.