A $1 billion proposal to build the first massive U.S. offshore wind-power farm has moved a step closer to overcoming permit requirements in Massachusetts, where it faces opposition from some influential residents.

Cape Wind Associates LLC, a privately funded Boston-based energy company, has proposed constructing 130 wind turbines over 24 square miles (62 sq km) in Nantucket Sound, within view of the wealthy Cape Cod resort region of Massachusetts.

The project, designed to power about 400,000 homes, won tentative approval by Massachusetts authorities for a certificate that combines nine state and local permits needed to build the turbines.

Cape Wind said in a statement on Friday that Thursday's ruling by the Massachusetts Energy Facilities Siting Board represented a major victory.

The board, created by the state legislature, instructed Cape Wind to work with two towns to agree on reasonable and customary conditions for permits for burying electric cables, Cape Wind said.

Opponents -- including some politicians and business leaders with homes on Cape Cod, Martha's Vineyard and Nantucket -- say Cape Wind's turbines would kill migrating birds, threaten the region's lucrative tourist industry and disrupt commercial fishing.

They include U.S. Senator Edward Kennedy along with some environmental groups and local fishermen.

Its supporters, including Massachusetts Governor Deval Patrick and some green groups, say the project would save millions of dollars in energy costs and help the nation reduce reliance on foreign oil at a time of volatile crude prices.

The Siting Board would intervene and decide what conditions are reasonable if Cape Wind fails reach agreement with the seaside towns of Yarmouth and Barnstable, Cape Wind added. The board expects to take its final vote within 60-days.

If formally approved, the so-called composite certificate would conclude all state and local permitting and overturn a Cape Cod Commission procedural denial of the project.

Cape Wind won a favorable environmental review in January from the U.S. Interior Department's Minerals Management Service, which found there would be little negative impact from the project, which would produce an average 170 megawatts.

The Obama administration will decide whether to grant final government approval.

Cape Wind says construction of the turbines, which would stand about 440 feet from the surface of the water to the tip of the blade, could begin by early next year with production starting in 2011 or 2012.

(Reporting by Jason Szep)

Energy