Officials have informed that Cape Wind, a wind farm proposed for Nantucket Sound in Massachusetts, signed its first contract with a local utility.

The Boston Globe reported on Saturday that the contract with National Grid, which includes a 3.5 percent annual price increase, will be submitted to the Massachusetts Department of Public Utilities for approval on Monday. If approved as submitted, the deal will add $1.59 to the customer's bill during the first year.

Cape Wind Associates president Jim Gordon said that the contract with the Waltham, Mass, utility will "helps put Massachusetts at the forefront of this emerging industry, and provides their customers with secure and stable-priced renewable energy."

The company further said that officials said having a contract in hand will help secure financing for the wind farm's construction, estimated to be about $1 billion. Cape Wind plans to generate up to 468 megawatts of electricity from 130 wind turbines.

State law requires utilities to purchase a percentage of their power from renewable sources such as wind farms or hydroelectric plants and pay an extra 6.1 cents per kilowatt hour for such power to help renewable energy providers.

Energy and Environmental Secretary Ian Bowles, noting the price of wind energy is projected to be more stable than the cost of natural gas-generated power, said, "I'm confident that over the life of the contract, the Cape Wind project will save money for Massachusetts customers." (With Inputs from Agencies)