The Hawaii Public Utilities Commission yesterday approved a power purchase agreement between Hawaiian Electric Company and Kahuku Wind Power, HECO said today.

Kahuku Wind Power, a subsidiary of Massachusetts-based First Wind, is scheduled to begin construction of a 12-turbine farm in the hills west of Kahuku later this year.

When complete, Kahuku Wind Power will have the capacity to generate an estimated 80,000 megawatt hours each year. HECO, citing U.S. Department of Energy statistics, says that's enough to power 7,700 Oahu homes, reduce oil consumption by about 153,000 barrels a year and cut carbon dioxide emissions by about 96 millions pounds per year.

Under terms of the contract, Kahuku Wind will sell as-available renewable energy to HECO at predetermined prices for 20 years.

"With long-term pricing de-linked from the cost of oil, this new source of renewable energy is a step toward breaking our vulnerability to the fluctuating price of oil and increasing our energy security," HECO president and CEO Dick Rosenblum said in a statement.

First Wind also owns and operates the 30-megawatt Kaheawa wind energy projects above Maalaea, Maui.