Alabama Power customers will see a slight drop in rates beginning June 9.

Company spokesperson Michael Sznajderman said rates would drop by 2 percent, or about $2.70 per month, for residential customers.

The state Public Service Commission recommended Tuesday to reduce the rates by 2 percent, and Alabama Power officials followed the commission’s recommendation.

Sznajderman said Alabama Power is passing its own savings on fuel on to customers.

“Those fuel prices have been coming down lately, particularly coal and natural gas. On top of that, we have been able to generate more hydropower lately because we had more rain. Hydro is our most inexpensive fuel source,” he said. “So, the combination of that, we’re essentially passing on these savings to our customers.”

However, customers’ fuel costs are still more than 10 percent higher than at this time last year.

In October 2008, Alabama Power raised their rates by 13 percent to try to recover a shortfall of $300 million, incurred when fuel prices rose rapidly.

“We’ve been chipping away at that ($300 million), and because the fuel prices have come down in the past month, we’ve been able to recover the fuel costs a lot faster,” Sznajderman said. “We had about $300 million we had to recover from our customers, and we’ve cut that in about half.”