Castle & Cooke and First Wind Hawai'i have agreed to build small-scale wind-energy projects on the Neighbor Islands, with the aim of moving the state closer to its goal of reducing its dependency on fossil fuel and creating clean energy.

Castle & Cooke, owner of 98 percent of Lana'i, wants to develop a wind farm on the island that could provide 20 percent of O'ahu's power needs. First Wind Hawai'i, which operates Kaheawa Wind Farm on Maui, wants to build a wind farm on Moloka'i and has been working with residents to achieve that goal.

Ultimately, both companies will sell electricity they generate to Hawaiian Electric Co. on O'ahu. In exchange, residents on the islands with the wind farms will see lower electricity bills.

Initially, each company competed for the right to create all the power, but in an agreement announced yesterday, Castle & Cooke and First Wind Hawai'i agreed to split the state's objective of generating 400 megawatts.

"We knew from the very beginning that we needed partners and we knew that the first partners have to be the Legislature," Gov. Linda Lingle said yesterday at a news conference. "Our goal, our focus, our mission of achieving 70 percent clean energy remains the same. There's no going back. We're on the right course and we'll stay the course."

The state hopes to get the wind farms blowing and transporting the energy to O'ahu in the next three years, said Ted Liu, director of the state Department of Business, Economic Development & Tourism. Even with these difficult economic times, Liu said, a private company would be willing to step forward to build the infrastructure necessary to connect the islands with undersea cables.

The U.S. Department of Energy has partnered with the state to create the Hawai'i Clean Energy Initiative. It sets 2030 as the target date for the state to derive 70 percent of its energy from "clean" sources such as wind.

Agreements like that announced yesterday are the only way that Hawaiian Electric Co. on O'ahu can tap into the renewable resources that are abundant on the Neighbor Islands, said Robbie Alm, HECO executive vice president. O'ahu just doesn't have the renewable resources to meet the electricity demand, he said.

"This is a good sign," Liu said of the wind farm agreement. "We need to send a clear signal that Hawai'i is where it needs to be."

The contracts will require approval from the Hawai'i Public Utilities Commission. Both wind developers will work with Hawaiian Electric to research how to integrate the electricity generated into the O'ahu power grid. A big component of that is how to transfer the electricity to O'ahu and the parties will work with the state in developing an undersea power transmission cable.