California Sues Trump Administration Over $120 Million Offshore Wind Buyout

California has sued the Trump administration over its deal to cancel a planned 2-gigawatt floating offshore wind project off the state’s Central Coast, challenging the administration’s increasingly aggressive strategy of paying developers to surrender federal wind leases and redirect investment toward oil and gas.

California Attorney General Rob Bonta and the California Energy Commission filed the lawsuit against the Trump administration and Golden State Wind LLC, arguing that the Department of the Interior lacked legal authority to reimburse the developer for abandoning its Morro Bay offshore wind lease.

The dispute centers on an agreement announced by Interior in April under which Golden State Wind agreed to relinquish its California lease and walk away from future U.S. offshore wind development.

Under the deal, Golden State Wind can recover roughly $120 million in lease payments after making an equivalent investment in U.S. oil and gas assets, energy infrastructure or Gulf Coast LNG projects.

California argues the arrangement amounts to an illegal use of federal taxpayer money.

According to the lawsuit, Interior plans to make the $120 million payment from the federal Judgment Fund, which is generally used to pay judgments and settlements against the U.S. government. California says there was no underlying lawsuit or legitimate legal claim to settle and accuses the administration of creating a settlement mechanism simply to cancel the lease.

“The Trump Administration’s backroom buyout with Golden State Wind to stop offshore wind development in favor of gas and oil drilling is, unfortunately, a classic playbook for them to line the pockets of their Big Oil donors,” Bonta said.

“Let’s be clear: California will continue to aggressively fight back against the Trump administration’s outrageous abuse of taxpayer dollars to abandon offshore wind investments that could have delivered union-paying jobs and reliable clean energy to Californians,” he added.

Golden State Wind acquired the 80,418-acre Morro Bay lease during the Biden administration’s first California offshore wind auction in December 2022. The lease was intended to support development of a roughly 2 GW floating offshore wind project.

California says the project also included more than $30 million in commitments for workforce training, supply-chain development and benefits for local communities, including fishermen’s associations.

The state has separately invested more than $100 million preparing ports, transmission systems and other infrastructure for a future offshore wind industry. California’s offshore wind strategy calls for developing as much as 25 GW by 2045, with ports including Long Beach and Humboldt expected to play major roles in staging and assembling floating wind turbines.

The lawsuit argues that Interior violated the Outer Continental Shelf Lands Act, which governs the department’s authority over offshore energy leases, as well as the Judgment Fund Act.

California is asking a federal court to invalidate the agreement and block the administration from carrying it out.

The challenge opens a new legal front in the Trump administration’s effort to dismantle much of the U.S. offshore wind development pipeline.

Earlier this year, federal courts repeatedly rejected administration efforts to stop several offshore wind projects already under construction on national security grounds. Since then, Interior has increasingly turned to negotiated settlements with developers whose projects have not yet reached construction.

Golden State Wind was one of two such agreements announced in April. Bluepoint Wind agreed to surrender its New York Bight lease while Global Infrastructure Partners committed up to $765 million to a U.S. LNG facility.

Those deals followed a roughly $928 million agreement with TotalEnergies to relinquish offshore wind leases and redirect investment toward LNG and upstream oil and gas.

The strategy has continued to expand.

Earlier this month, RWE agreed to surrender offshore wind leases in the New York Bight, California and Louisiana as part of a $1.22 billion settlement with the federal government. RWE simultaneously announced plans to invest $900 million for an indirect 16% stake in the Louisiana LNG export project and reserve $300 million worth of gas turbine capacity.

Duke Energy, Invenergy and other developers have also reached agreements to abandon offshore wind leases as the administration pushes investment toward conventional energy.

The cancellations are steadily shrinking what was once expected to become a major new maritime market in the United States.

Floating wind development off California in particular was expected to require substantial investments in specialized vessels, port infrastructure, fabrication facilities, feeder barges and other parts of the domestic maritime supply chain.

“Offshore wind presents an opportunity for our state to scale up an innovative new clean energy industry that reduces pollution while providing new jobs and investment for the people of our state,” California Energy Commission Chair David Hochschild said.

“We will not let the Trump administration’s reckless actions turn back the clock,” he added. “California’s clean energy future is worth fighting for. See you in court.”

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