Virginia Electric & Power Co. yesterday said lower fuel costs will make it possible to cut electric bills by nearly $2 a month for the second half of the year, if the State Corporation Commission approves.

The proposed reduction in the fuel adjustment factor would offset about half of the increase in basic utility rates that Vepco asked for earlier this year.

The commission is scheduled to begin hearings next Monday on Vepco's request for a 5.1 percent electric rate increase which would add $3.80 a month to the bill of a residential customer using 1,000 kilowatt hours of power.

The cut in fuel costs requested yesterday would reduce the monthly bill of that customer by about $1.92 a month or 2.6 percent a year.

The utility company is required by Virginia law to adjust electric bills twice a year to reflect changes in the cost of generating power. Usually the fuel adjustments are approved automaticaly by the Corporation Commission without hearings.

Vepco President William Berry said fuel costs are expected to decline because of lower coal prices, lower coal shipping costs and improved efficiency of power plants due to modernization.

Vepco's fuel costs have been going down since 1980 because the company has increased its use of nuclear power, converted many oil-burning plants to handle coal and made its generators more efficient.