NARRAGANSETT, R.I. (AP) – The state of Rhode Island has agreed to work with an Australian firm to explore whether floating generators off Rhode Island’s shoreline could harness sea waves to produce electricity.

Gov. Don Carcieri said Tuesday the state has reached an agreement with Oceanlinx Limited to build and test a 1.5- megawatt generator somewhere off Block Island. A turbine that size could power more than 1,700 homes when running at its peak, although it would function at a fraction of that capacity most of the time.

If the test project succeeds, Oceanlinx would seek to a build a 15- to 20-megawatt facility somewhere off mainland Rhode Island, said Tom Denniss, the company’s executive director and chief technology officer.

Denniss did not set a timeline for the project, and several major issues must be resolved before it could proceed, not the least of which is how the project would be financed. Denniss would not put an exact pricetag on the effort, but he said it would cost several million dollars. The state would seek to use bonds to make up its share, state officials said.

The project also requires permits from the Coastal Resources Management Council, a state agency, and the Federal Energy Regulatory Commission.

Neither agency has issued permits for a wave energy generator before, Denniss said.

Oceanlinx now operates one wave energy generator in Port Kembla, Australia. Besides its plans for Rhode Island, the company is working to develop four other projects elsewhere.

The company builds generators which float on the ocean’s surface. When waves pass through an empty chamber near sea level, the rising water forces air through a narrow opening at the top. That gust of air spins a turbine blade, generating electricity. When the water level falls, the chamber becomes a vacuum that sucks outside air over the turbine blade, causing it to spin again.

Renewable energy is a key part of Carcieri’s plan to stabilize electricity prices in Rhode Island, which depends heavily on expensive, imported natural gas.

“We have nothing,” Carcieri said at a news conference to announce the deal reached in October. “We don’t have oil, we don’t have natural gas in the state of Rhode Island. We’re the end of the line, if you will, dependent on the fluctuations of those global markets.”

Carcieri wants to build enough renewable energy projects to supply 20 percent of the state’s electricity needs by 2011, when the term-limited governor leaves office.

Earlier this year, his administration proposed building more than 100 offshore wind turbines to meet three-quarters of that goal, although Carcieri’s chief energy adviser said the project will likely stretch past the 2011 deadline.

The rest of the renewable energy is supposed to come from sources that include wave energy generators, solar power and small hydroelectric dams.

AP-ES-12-04-07 1751EST