California has informed the US Department of the Interior (DOI) and RWE about its intention to sue over the $1.22 billion agreement to cancel three offshore wind leases, including one in federal waters off California. A separate 60-day pre-suit period is also underway concerning the $111 million Invenergy lease buyout in the state.
The State Attorney General Rob Bonta and the California Energy Commission (CEC) issued a Notice of Intent to Sue to DOI and RWE on September 1. This challenges the agreement announced in August, where DOI would cancel RWE affiliates’ offshore wind leases off the coasts of California, Louisiana, and New York in exchange for $1.22 billion in settlement funds, which RWE must reinvest in LNG infrastructure and natural gas projects nationwide.
The lawsuit targets Lease OCS-P 0561 in the Humboldt Wind Energy Area, acquired by RWE Offshore Wind Holdings in 2022 and assigned to its subsidiary Canopy Offshore Wind in 2024. The site off northern California can support up to 1.6 GW of floating offshore wind capacity.
For this lease, the agreement between DOI and RWE provides $121.3 million in reimbursement to Canopy, equivalent to the lease payment minus $36.4 million in bid credits meant for workforce training and community benefits in California.
The state argues that the RWE buyout violates the Outer Continental Shelf Lands Act (OCSLA), which gives California a role in federal offshore wind leasing.
In the Notice, California claims the federal government did not hold a hearing before the lease cancellation, failed to suspend it for five years before cancellation, and did not coordinate with governors of affected states. The State also alleges failure to consider statutory priorities for offshore renewable energy development, compliance with lease relinquishment regulations, and provisions governing lease cancellation.
California contends the agreement provides compensation exceeding the statutory formula for lease cancellations and suspensions, violating OCSLA.
The notice indicates the agreement and lease cancellation cause ongoing harm to California, necessitating judicial action to enforce OCSLA compliance. The Notice of Intent to Sue gives DOI and RWE 60 days to address alleged violations before a lawsuit is filed.
RWE’s cancellation agreement is the third federal offshore wind lease buyout challenged by California.
The Attorney General and the CEC announced their intention to sue shortly after filing a lawsuit over the $120 million Golden State Wind lease buyout in the Morro Bay Wind Energy Area, with a Notice sent to DOI and Golden State Wind LLC on June 23 this year.
On July 16, Bonta and CEC issued a Notice of Intent to Sue over DOI’s agreement with Invenergy, which would cancel Invenergy’s offshore wind lease in the Morro Bay Wind Energy Area off California’s Central Coast.
Under that agreement, announced on June 17, DOI would pay over $111 million to an Invenergy subsidiary to abandon the lease, with the company making equivalent investments in fossil fuel or geothermal projects.
In the Notice from July 16, California claimed the Invenergy deal also violated OCSLA, giving DOI and Invenergy 60 days to address violations before a lawsuit is filed.
The Invenergy lease covers Lease OCS-P 0565 in the Morro Bay Wind Energy Area, where Invenergy planned a floating wind project of up to 2 GW.
California argues that both RWE and Invenergy agreements threaten its offshore wind development and the over $100 million invested in ports, transmission systems, and industries in preparation for the sector. The state’s strategic plan calls for 25 GW of offshore wind capacity by 2045, enough to power roughly 25 million homes and account for about 13% of the state’s electricity supply.
Follow offshoreWIND.biz on:
“`
Original Story at www.offshorewind.biz