KNOXVILLE (AP)-Rates for Tennessee Valley Authority residential customers will drop between $1 and $3 in the billing period that starts Jan. 1 due to another reduction in fuel costs.

The change reflects more hydroelectric generation because of rain and a reduction in projected future costs.

TVA began the fiscal year Oct. 1 with an 8 percent general rate increase but because of reduced fuel adjustment costs, customers are still paying less than a year ago.

There have been five drops in the fuel cost adjustment cost this year.

TVA uses the fuel cost adjustment to help recover fluctuating fuel and purchased power costs.

TVA is the nation's largest public utility with nearly 9 million customers in Tennessee, Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia.