California has announced its intention to sue the US Department of the Interior (DOI) and Golden State Wind (GSW) over a federal agreement to terminate an offshore wind lease off the state’s Central Coast.
California Attorney General Rob Bonta and California Energy Commission (CEC) Chair David Hochschild issued a Notice of Intent to Sue on June 23, claiming the agreement violates the Outer Continental Shelf Lands Act (OCSLA) and threatens the state’s offshore wind development plans, clean energy targets, and public investments.
The dispute involves the Morro Bay offshore wind lease, acquired by Golden State Wind in a 2022 federal auction, aimed to support a 2 GW floating wind farm. Golden State Wind is a joint venture of Ocean Winds and Reventus Power.
In April 2026, the DOI agreed to terminate the lease, providing GSW with USD 120 million in compensation and requiring them to invest an equivalent amount in fossil fuel projects outside California.
California argues the agreement was reached without state involvement, alleging that federal authorities cited unspecified national security concerns to justify canceling a lease area already reviewed and consulted federally.
The Notice of Intent to Sue gives the DOI and Golden State Wind 60 days to address alleged violations before a lawsuit is filed. The state warns that canceling the project could jeopardize over USD 100 million in public investments in preparing ports, transmission infrastructure, and supply chains for offshore wind development.
“If allowed to proceed, the lease buyout threatens to set back California’s burgeoning offshore wind industry by years. Just last week, the Trump Administration used the same maneuver to pay off another California offshore wind leaseholder, Invenergy, to the tune of $765 million,” the California Energy Commission stated in a press release on June 23.
The DOI announced a similar agreement with Invenergy on June 17, under which the developer relinquished four offshore wind leases for a USD 765 million refund and commitments to invest in natural gas and geothermal projects elsewhere in the US. Invenergy’s projects include a 2 GW lease area in the Morro Bay Wind Energy Area (WEA), branded as Even Keel Wind.
Following the Invenergy announcement, the California Energy Commission issued an investigative subpoena to Invenergy for a copy of the settlement agreement, which the DOI has not made public, and information on its basis, negotiation, and impact.
A similar subpoena was issued to Golden State Wind in May after its agreement with the DOI.
“State agencies and taxpayers have made significant investments in planning and port readiness because developers said those investments were necessary to deliver these projects. If the federal government is funding buyouts, Californians who invested years of time, money, and effort preparing for these projects should not be left empty-handed while developers are rewarded for walking away. California will carefully review any and all investigative materials and act as appropriate to protect our communities and our clean energy future,” the California Energy Commission stated on June 23.
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