California has notified the US Department of the Interior (DOI) and Golden State Wind (GSW) of its intention to sue over the federal government’s agreement with the developer to terminate an offshore wind lease off the state’s Central Coast.
In a Notice of Intent to Sue issued on 23 June, California Attorney General Rob Bonta and California Energy Commission (CEC) Chair David Hochschild said 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 in the sector.
The dispute centres on the Morro Bay offshore wind lease acquired by Golden State Wind in a federal auction in 2022, which was planned to support a 2 GW floating wind farm. Golden State Wind is a joint venture of Ocean Winds and Reventus Power.
The DOI agreed in April 2026 to terminate the lease and provide GSW with USD 120 million in compensation, while requiring the company to invest an equivalent amount in fossil fuel projects outside California.
California claims the agreement was reached without the state’s involvement and alleges that the federal government relied on unspecified national security concerns to justify cancelling a lease area that had already undergone federal review and consultation.
The Notice of Intent to Sue gives the DOI and Golden State Wind 60 days to address the alleged violations before California files a lawsuit. The state argues that cancelling the project could undermine more than USD 100 million in public investments made to prepare 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 said in a press release on 23 June.
As reported last week, the DOI announced a similar agreement with Invenergy on 17 June, under which the developer agreed to relinquish four offshore wind leases in exchange for a USD 765 million refund and commitments to invest in natural gas and geothermal projects elsewhere in the US. Invenergy’s four projects also include a 2 GW lease area in the Morro Bay Wind Energy Area (WEA), which the company secured in 2022 and later branded the project as Even Keel Wind.
The California Energy Commission said that, following the announcement on Invenergy reaching an agreement with the federal government, it had also issued an investigative subpoena to Invenergy seeking a copy of the settlement agreement, which DOI has not made public, and information concerning its basis, negotiation, and impact.
The Commission issued a similar subpoena 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 said on 23 June.