The settlement of a gas-rate case before the Federal Energy Regulatory Commission means that Mountain Fuel Supply Co. customers in Utah will soon see their gas bills drop.

Mountain Fuel filed a request with the Utah Public Service Commission on Wednesday to reduce its natural gas rates, which would chop about $5 from the yearly heating bill for a typical Utah residential customer.Altogether, the reduction would amount to $3.3 million. The change would go into effect on Jan. 1, assuming the PSC approves.

"This is the fourth consecutive pass-through rate decrease Mountain Fuel has implemented in its Utah service area in the past two years," said company spokesman Darren Shepherd. Added to those others, this decrease means residential gas-users will pay about 6.5 percent less than they did two years ago.

"The typical residential customer's annual bill will be $555 per year, compared with $593.57 two years ago, a decrease of $38.57," he said.

A main reason for the reduction is that Mountain Fuel is paying less for gas purchased from its principal supplier, Questar Pipeline Co.

Adrian Gostick, communication coordinator for Questar, speaking for the pipeline subsidiary, said Questar Pipeline settled a general rate case before FERC on Nov. 3, reducing its rates.

The case was before federal regulators because Questar Pipeline is an interstate operation, going through Utah, Wyoming and Colorado.

"The new rates are retroactive to Nov. 1, 1991," Gostick said. "Actually, it ended up that Mountain Fuel came out with a refund, and they were able to pass that along to their customers."

Mountain Fuel uses gas both from its own reserves and from those supplied by other companies. The company's own reserves are less expensive.

The decrease was part of the utility's semiannual cost adjustments, or "pass through" requests, which allow Mountain Fuel to adjust rates twice a year to reflect changes in its costs.