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The wind farm will spread over about 3,000 acres just south of Wessington Springs.
Jim Burg, Wessington Springs mayor and former state Public Utilities Commission member, said preparation for construction could start soon.
"I think you'll see a lot of activity this year as far as testing soils and surveying and all those types of things," he said. "You'll see some of that happening anytime but I'm told that construction won't begin until 2008."
The project includes 34 large wind turbines, each 262 feet tall with a rotor diameter of 253 feet.
Currently, the largest wind farm in the state, near Highmore, has 27 turbines. Other projects already in the works could end up being larger.
"We were looking for a premiere wind developer and we found that in Babcock & Brown," Mike McDowell, Heartland's general manager and CEO, said of the firm from Sydney, Australia.
Talks with Babcock & Brown have taken place during the last 18 months.
Babcock & Brown, a global investment firm, has 26 offices in Australia, North America, Europe, Asia, Africa and the Middle East. It will own and operate the Wessington Springs wind farm.
The wind farm will supply electricity to the Western Area Power Administration grid.
The wind farm was first announced in February but depended on the signing of an agreement to buy the power.
"This is what I've been hoping for for quite a while," said Burg, who has been working for seven years to encourage construction of a wind farm outside Wessington Springs.
Once construction starts, project should take less than six months, he said. Crews will pour concrete bases, build the towers and create access roads between each tower.
Babcock & Brown is the fourth-largest wind developer in the world, McDowell said.
"We knew when we began to deal with them that we found the right company," he said. "This will be a tremendous energy producer for Heartland."
He said it's the entry into the renewable energy field that Heartland wanted. The project will benefit Heartland customers in South Dakota, Minnesota and Iowa, according to McDowell.
Burg said he hasn't heard any complaints about the turbines' effect on the landscape.
"It doesn't affect the ability to use the land at all," he said. "There's not that many people that live there, so the chances of one of those turbines being close to somebody's house is pretty minimal.
"Just the idea of the economic development that will happen in the community (is) encouraging for everybody."
Babcock & Brown plans to buy NorthWestern in a cash deal worth $2.2 billion and operate the utility as a privately owned subsidiary with the same managers.
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