KY Utility's Biggest Customer Set to Go Offline

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LOUISVILLE, Ky. (AP) -- A western Kentucky aluminum smelter is moving closer to ending its power purchasing agreement with a Kentucky utility that depends on the massive plant for more than a third of its annual revenue.

Big Rivers Electric says the loss of Century Aluminum will lead to 19 percent rate hikes for residential customers. Big Rivers said in a statement it has finalized an agreement with Century that must be approved by the Kentucky Public Service Commission.

The commission is holding public hearings Thursday on the proposed increases.

Century Aluminum's contract ends in August. Big Rivers CEO Mark Bailey says Century's smelter and the Rio Tinto Alcan smelter generated $360 million, or 64 percent, of Big Rivers' revenue in 2012. Rio Tinto is also planning to stop buying power from Big Rivers.

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