A pilot offshore wind farm project in Maine has received a key approval from state utility regulators, opening the way for federal funding.

In a 2-1 vote Tuesday, the Maine Public Utilities Commission approved a term sheet for the 12-megawatt Maine Aqua Ventus project proposed by Maine Prime Technologies, a for-profit spinoff that represents the University of Maine and two general partners, Maine-based Cianbro Corp. and Emera Inc. of Nova Scotia, Canada.

The term sheet sets a price at which the developers would be able to sell power to customers of Central Maine Power.

Jake Ward, the University of Maine's vice president of innovation and economic development, said the approval of the term sheet allows Maine Aqua Ventus to compete for a $46 million grant from the U.S. Department of Energy, expected to be awarded in May.

"Once we're at the 100 percent design, then we can start looking at the whole construction process, and construction and installation and operation," Ward was quoted as saying by the Maine Public Broadcasting Network. "And the Department of Energy has a schedule that would predict that we could be in the water and operating by the end of 2017."

In May, the consortium launched a one-eighth-scale prototype of the University of Maine's "VolturnUS" floating wind turbine off Castine, Maine.

The turbine began generating power that month and became the first offshore wind turbine in the Americas to send electricity into the power grid, the Bangor Daily News said.

The unit, made of advanced composite materials designed to fight corrosion and reduce weight, has a concrete hull, which has a longer life span in the ocean than steel.

The Maine Aqua Vent project is expected to generate enough power for as many as 7,000 Maine homes, but will cost ratepayers about $9 more a year on their utility bills.

The consortium's long-term aim is to construct a 500-megawatt offshore wind farm project in the Gulf of Maine and to achieve wind-generated electricity at 10 cents per kilowatt hour by the mid 2020s.

"In this industry, by scaling up the technology from the research labs into a demonstration and then a full-scale project, that's where the costs are going to drop," Habib Dagher, director of the Advanced Structures and Composites Center at the University of Maine, and leader of the project, was quoted as saying by the newspaper. "Our goal is to be competitive with other forms of electricity in the 2020s."