The state Public Service Commission voted 3-0 Thursday to approve Wisconsin Power & Light Co.'s proposal to build a 122-turbine wind farm in Minnesota.

The project still needs regulatory approval in Minnesota, but Wisconsin commissioners were asked to weigh in to evaluate whether the project was needed and cost-effective for ratepayers.

The Freeborn County project would generate about 200 megawatts of electricity, or enough to power about 50,000 homes over a year.

WP&L estimated that the project, known as Bent Tree Wind Farm, will cost $425 million to $475 million. The Madison utility projected in a regulatory filing that costs for the wind farm are part of the 9% rate increase that has been proposed for electricity customers in 2010. The wind farm would mean an additional $3 on the monthly utility bill for a residential customer using 600 kilowatt-hours of electricity per month.

A nonprofit group seeking to expand renewable energy in Wisconsin said the decision was something of a lost opportunity for the state.

"It is true that wind-power projects in Iowa and Minnesota are lower-cost sources of electricity than those in Wisconsin," said Michael Vickerman, executive director of Renew Wisconsin. "However, when a Wisconsin utility locates a renewable-energy project in another state, Wisconsin loses the economic boost from building and operating that project."

Late last year, the commissioners appointed by Gov. Jim Doyle rejected the utility's proposal to build a coal-fired power plant in southwestern Wisconsin, along the Mississippi River in Cassville.

WP&L also plans to buy wind power from a NextEra Energy wind project in Iowa, under an agreement with the utility, formerly known as FPL Energy. NextEra operates the Montfort wind farm in Wisconsin and the Point Beach nuclear plant.

Utility spokesman Steve Schultz said the company would proceed within weeks to finalize agreements to buy power from the Crystal Lake wind project in Iowa, which NextEra built. Under the agreements, WP&L would buy 200 megawatts of power from NextEra for the next year, and 100 megawatts for the 24 years after that.

The Bent Tree and Crystal Lake projects, along with the company's Cedar Ridge wind project in Wisconsin, will mean that by 2012, renewable energy should supply 12% of the utility's electricity.

Under state law, at least 9% of WP&L's power supply must come from renewables by 2015.