The resolution of a longstanding regulatory dispute between two federal agencies in the US is expected to clear the road ahead for wind projects to move forward.

The agreement clears the way for the Interior Department to establish rules governing the development of alternative energy projects.

The Department’s branch that manages the nation’s offshore energy resources - Minerals Management Service and the Federal Energy Regulatory Commission (FERC) were at odds for three years over which agency has the primary jurisdiction for projects in the outer continental shelf that seek to harness the power of waves and tides to generate electricity. The FERC for years has claimed jurisdiction over wave, but not wind, projects in federal waters.

The dispute has left the companies looking to develop offshore wind power projects dangling. A report by the Interior Department in 2006 said wind energy in the nation’s outer continental shelf has the potential to provide 900,000 megawatts of power, close to the total currently installed US electrical capacity.

Interior Secretary Ken Salazar said that the intention of FERC and Interior’s Minerals Management Service (MMS) is to work together to finalise rules governing all offshore alternative energies. The two agencies will issue a broader memorandum of understanding outlining the process by which permits and licences related to offshore renewable energy resources will be developed, Salazar said.

“Interior’s authority does not diminish existing responsibilities that other agencies have with regard to the outer continental shelf,” the statement signed by Salazar and FERC acting Chairman Jon Wellinghoff says.