Natural gas prices dropped 24 percent Wednesday for National Fuel Gas Distribution Corp. residential customers. However, the utility acknowledged gas prices are still more than 4 percent higher than about the same time last year.

In its annual gas-cost filing with the Pennsylvania Public Utility Commission, NFG said it sought the decrease for the price of gas. The $87.956 million decrease would lower the typical residential customer's annual bill from $1,486 to $1,130, NFG said.

At about this time last year -- Sept. 1 -- the average resident was paying $1,080 annually, or about $90 a month. With the 24 percent price drop, residents will pay $94 a month, the utility said.

The 24 percent drop is based on what residential customers were paying after natural gas prices skyrocketed last winter because of heavy demand, low temperatures and low supplies.

By law, natural gas utilities can't earn a profit on the price it charges for gas. Instead, the utility generates profits from fees and distribution expenses.

Wednesday's filing with the PUC is effective Aug. 1 through July 31, 2002. But each quarter, the utility can adjust the price it charges for gas, based on unexpected increases or decreases in the market price. The next quarterly adjustment for NFG is scheduled for Nov. 1.

Earlier this year NFG predicted a 14 percent drop in gas prices. The utility was able to cut the rates further due to substantial decreases in gas costs, said Sandra James, assistant director of corporate communications for NFG.

Gas prices have been falling in recent months due to increased drilling and mild weather.

NFG serves about 209,000 customers in 14 counties in northwestern Pennsylvania including Mercer County.