The state of Rhode Island signed a joint development agreement with Deepwater Wind Thursday that could lead to the placement of four to eight wind turbines three miles off the southeastern coast of Block Island as early as 2010.

The legally binding agreement envisions the wind farm providing 20 megawatts of power with a tie-in to the island. That's more than enough electricity to power the entire island and it could cost much less than island customers are accustomed to paying.

Deepwater Chief Operating Officer Chris Wissemann said electricity would come at a cost of less than the 65 cents a kilowatt-hour that island customers were paying last summer. He declined to speculate on an exact cost and said who, exactly, would buy the electricity has yet to be determined.

The turbines off the coast of Block Island would come as part of Phase One of a two-phase project. The plan calls for New Jersey-based Deepwater to start construction on the 20-megawatt farm in late 2010 with a completion date in late June 2012. The construction would require the approval of the state Coastal Resources Management Council, state Department of Environmental Management and federal Army Corps of Engineers. The offshore part of the project would be outside the regulatory reach of the town, but the town could regulate on-island substations and the like.

The most resistance, however, might come from residents concerned about their viewshed. Wissemann said Deepwater is gearing up for public presentations on the island and spent last Tuesday meeting with town officials and management at the Block Island Power Company (BIPCo).

Wissemann said those talks also dealt with who would own and control a proposed electric cable that would run from the island to the mainland, potentially opening the door for cheaper electric rates. Wissemann said many of the details, including who actually owns the cable, must still be worked out. But the agreement calls on the company and state Energy Office to find a way to bring electricity from the mainland to BIPCo and vice versa.

The two "shall cooperate with and assist in arranging transmission from Block Island to mainland Rhode Island and to Block Island from mainland Rhode Island," the agreement says, "...and shall endeavor to reduce the costs of any such transmission to a minimum and arrange an equitable sharing of the costs of such transmission among BIPCO, the project and the relevant transmission provider.

Wissemann expected construction on the cable to occur simultaneously with Phase One. After the completion of Phase One, the company would start construction on a utility-scale project in a separate area within three years of gaining approval from the federal Mineral Management Service, a division of the Department of the Interior, which governs leases for wind farms in federal waters. The location of that farm has yet to be determined but company and state officials have ruled out putting it near Newport or in Narragansett Bay. All told the company proposes about 107 wind turbines stretching 240 feet into the air with blades of about 206 feet from end to end.

Scientists at the CRMC and University of Rhode Island are developing an Ocean Special Area Management Plan to identify potential areas for the farms. On Thursday Wissemann said initial studies for the 20-megawatt farm favored the area off southeastern Block Island.

A stakeholder group, including New Shoreham First Warden Kim Gaffett, is offering comments on the SAMP. The schedule calls for scientists to complete the plan in February 2010.

If the project is completed on schedule, it would mark the first offshore wind farm in the United States. The project also calls for a manufacturing facility to be built at Quonset that would manufacture the "jackets" the turbines stand on. State and company officials estimate the plant would employ 800 people with annual wages of $60 million.

"We see this as a game changing solution to Rhode Island's energy future," said Michael Saul, Interim Executive Director of the Economic Development Corporation, in a news release. "This agreement is the culmination of a rigorous process, which concluded that Deepwater Wind was the preferred developer on a number of fronts. Their experience and capital resources position Rhode Island with a capable partner for this significant project."

Global investment firm D.E. Shaw and First Wind Energy, a developer of on-shore wind farms, are major investors in the privately financed project that is expected to cost $1.5 billion. A committee appointed by the governor selected Deepwater from seven proposals last year.

The selection followed a 2006 announcement from Governor Donald Carcieri that he aimed to construct renewable energy sources capable of providing 20 percent of the state's electricity. On Thursday he hailed the joint development agreement in a news release.

"This agreement sets the stage for Rhode Island to be the leader in the emerging renewable energy industry in the Northeast, and brings us one step closer to increasing our use of renewable sources to generate 20 percent of our electricity needs," Carcieri said. "With this agreement, we have set a clear timetable for the development including the construction of a major manufacturing facility at Quonset, bringing an estimated 800 high-quality jobs to Rhode Island."