PROVIDENCE - Despite pressure from the governor and other state officials, National Grid has again rejected a proposal to buy clean power from a developer proposing to build a $200-million wind farm off Block Island.

In a letter filed late Wednesday afternoon with state regulators, Rhode Island's largest electric utility said it would not agree to the latest offer from Deepwater Wind for power from the eight-turbine wind farm that would provide electricity to Block Island because the price is still too high.

It is the second time National Grid has turned down the New Jersey-based startup company's overtures. The first rejection came Oct. 15.

The decision follows a month of renewed talks between the two sides and entreaties from Governor Carcieri, who believes offshore wind development would stabilize energy prices and provide hundreds of jobs in the state. In June, Carcieri signed into law a bill requiring National Grid to purchase green power.

Although Wednesday's filing represents a setback for Deepwater and its plans to build the first offshore wind farm in the country, it does not mean an agreement will not be reached eventually. In fact, the letter from National Grid attorney Ronald T. Gerwatowski offers some flexibility in the utility's position.

There is still time for the two sides to find common ground. The state Public Utilities Commission has until Jan. 31 to rule on a contract. In the meantime, the agency can order arbitration.

But the negotiations have presented unforeseen difficulties for Deepwater, which envisions the Block Island wind farm as a demonstrator project preceding a $1.3-billion 106-turbine wind farm about 15 miles off the Rhode Island coast.

Deepwater also plans to sell energy from the larger project to National Grid, so the current deadlock does not bode well for future talks over a second power-purchase agreement.

Under the latest proposal, Deepwater would sell energy from the wind farm at 25.3 cents per kilowatt-hour, a price that would increase by 3.5 percent annually, according to the utility. National Grid currently pays an average of 9.2 cents per kilowatt-hour for power from conventional sources, including natural gas-fired plants.

National Grid maintains that Deepwater's price is too high compared with the cost of power from fossil fuels, and may be even more expensive than other clean energy projects. The utility says the offshore wind farm's price may even go up because of the added expenses of an underwater transmission cable from Block Island to the mainland that could cost $35 million to $50 million.

"National Grid believes that there are likely to be other renewable-generation projects that will present less expensive renewable-generation options for customers that will achieve the same or greater environmental benefits," Gerwatowski wrote in the filing. "These would be projects that are able to take advantage of economies of scale or may be smaller in size, but do not confront the types of additional costs associated with this complex offshore demonstration project."

Paul Rich, Deepwater's chief development officer, questioned the price quoted by National Grid. He said his company offered to sell power at 22.1 cents per kilowatt-hour. National Grid may have adjusted the price for inflation because the first year of the contract would be 2013, Rich said.

The new fixed price was lower than the price Deepwater initially offered, which was dependent on a host of variables. National Grid calculated that first offer to be 30.7 cents per kilowatt-hour and demanded a new price.

"This is in line with major European wind farms in an established market with an established supply chain," Rich said of the latest price. "As far as other renewables, you can't get a better scalable, renewable energy resource in this state."

The cost of power from the wind farm would be spread among all Rhode Islanders. Because it would be a relatively small amount of power compared with all of the energy that flows through the grid, that additional cost would be minimal. Deepwater estimates that even with a 2.75-percent markup National Grid is allowed by law, the average ratepayer would see a total annual increase in their bill of $7.

If there is a silver lining for Deepwater, it is that National Grid in its new finding has taken a less intransigent position than it did originally.

"If ... the objective is to facilitate a small-scale offshore wind demonstration project for Rhode Island, and also establish a transmission link to Block Island, there may be a rational basis for the commission to approve the agreement," Gerwatowski wrote.

At present, the island receives its power from diesel generators and has one of the highest rates in the nation.