Mighty River Power, a state-owned energy company, is to partner with Palmerston North City Council in its plans to develop a $300 million wind farm on reserve land in Turitea, near Palmerston North.

Mighty River will develop the wind farm and make an annual payment to the city.

Ratepayers will get to have a say on the project at the resource consent hearing late next year.

Mighty River Power chief executive Doug Heffernan said the company needed to collect data on wind speeds at the Turitea site before it could determine how many and what size turbines would be at the wind farm.

There would be at least 40, and they would look similar to turbines at the Te Apiti site, he said.

Early indications were that the site might be suitable for a project of around 120 to 150MW, he said.

The first turbines should be in action early in 2008.

City council chief executive Paul Wylie said the financial gain to the city would be significant.

Late last year the council indicated the annual payment might be around $250,000, but Mr Wylie would not give a figure yesterday saying it was commercially sensitive.

"It's not a simple equation, but it will be a very significant gain for the city and it's better than what we originally budgeted. The ratepayers will certainly know the difference."

Because of Turitea's reserve status, all income must be spent on the city's reserves.

About $50 million will be spent in the local community on construction, manufacture, employment and supply of commodities.

Mayor Heather Tanguay said the council approved the partnership.

The wind farm will be the region's fourth. An ecopark would be established with the wind farm and people could comment on what they wanted to see in the park during the annual plan process next year, Mr Wylie said.

Mrs Tanguay said she was proud that the city was becoming known as the wind capital of Australasia.

In the future, the electricity for 200,000 homes around the country would be coming from wind power in Palmerston North, she said.

- nzpa