The state Department of Public Utilities has approved a 15‑year power purchase agreement between the electric company NStar and Cape Wind Associates, the company that plans to build a wind farm on Nantucket Sound.

The approval was announced this week following an eight-month adjudicatory proceeding.

“The DPU concluded that the benefits of the contract exceeded its costs and that the agreement provides adequate protections for ratepayers,” a press release from the state utility regulator said. “The contract will assist NStar and the commonwealth in complying with the state’s renewable energy and greenhouse gas emissions reduction requirements, moderating the system peak load demand, enhancing the electric reliability in the state, and creating jobs . . . It is clear that the Cape Wind facility offers significant benefits that are not currently available from other renewables.”

The contract sets a base price of 18.7 cents per kilowatt hour for 2013 with a 3.5 per cent annual increase. Contract terms are similar to the terms of a contract approved in 2010 between National Grid and Cape Wind, the DPU said.

The contract is expected to increase electric bills by 1.3 to 1.4 per cent for residential customers and one to 2.1 per cent for commercial and industrial customers. On average, the bill of a typical NStar residential customer will increase by about $1.16 per month, the DPU said.

Cape Wind, which plans to build 130 turbines on Horseshoe Shoal, has now secured contracts for more than 75 per cent of its output.