California has launched a lawsuit against the Trump administration over its decision to cancel a planned 2-gigawatt floating offshore wind project off the state's Central Coast. The state is challenging the administration's strategy of paying developers to give up federal wind leases and redirect investments 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. They argue that the Department of the Interior did not have the legal authority to compensate the developer for abandoning its Morro Bay offshore wind lease.
The dispute revolves around an agreement made by the Interior Department in April, where Golden State Wind agreed to cancel its California lease and abandon future U.S. offshore wind development.
As part of the deal, Golden State Wind can recover about $120 million in lease payments after investing the same amount in U.S. oil and gas projects, energy infrastructure, or Gulf Coast LNG projects.
California claims that this agreement is an illegal use of federal taxpayer money.
According to the lawsuit, the Department of the Interior plans to use the federal Judgment Fund to make the $120 million payment. This fund is typically reserved for paying legal judgments and settlements against the U.S. government. California argues that there was no actual lawsuit or valid legal claim to settle, accusing the administration of creating this mechanism merely to terminate the lease.
“The Trump administration's backroom deal with Golden State Wind to halt offshore wind development in favor of oil and gas drilling is a classic move to benefit their Big Oil donors,” Bonta stated.
“California will continue to fight against the outrageous misuse of taxpayer dollars to abandon offshore wind projects that could provide union jobs and reliable clean energy for 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. This lease was expected to support the development of a floating offshore wind project with a capacity of approximately 2 GW.
California also highlights that the project included over $30 million in commitments for workforce training, supply chain development, and benefits for local communities, including fishermen’s associations.
Separately, California has invested more than $100 million in preparing ports, transmission systems, and infrastructure for a future offshore wind industry. The state aims to develop up to 25 GW of offshore wind power by 2045, with ports like Long Beach and Humboldt playing key roles in staging and assembling floating wind turbines.
The lawsuit argues that the Department of the Interior violated the Outer Continental Shelf Lands Act, which regulates offshore energy leases, as well as the Judgment Fund Act.
California is requesting a federal court to invalidate the agreement and prevent the administration from executing it.
This lawsuit represents a new legal challenge to the Trump administration's efforts to dismantle many aspects of the U.S. offshore wind development pipeline.
Earlier this year, federal courts rejected the administration's attempts to halt several offshore wind projects already under construction for national security reasons. Since then, the Interior Department has increasingly looked to negotiate settlements with developers whose projects are not yet under construction.
Golden State Wind was one of two agreements announced in April. Bluepoint Wind agreed to relinquish its New York Bight lease, while Global Infrastructure Partners pledged up to $765 million for a U.S. LNG facility.
These deals followed a nearly $928 million agreement with TotalEnergies to give up offshore wind leases and redirect funds toward LNG and upstream oil and gas.
This strategy has broadened further.
Earlier this month, RWE agreed to cancel offshore wind leases in the New York Bight, California, and Louisiana as part of a $1.22 billion settlement with the federal government. Simultaneously, RWE announced plans to invest $900 million for a 16% indirect stake in a Louisiana LNG export project and reserved $300 million for gas turbine capacity.
Duke Energy, Invenergy, and other developers have also agreed to drop offshore wind leases as the administration shifts investments toward conventional energy sources.
These cancellations are rapidly reducing what was once expected to be a significant new maritime market in the United States.
The floating wind development off California was anticipated to need major investments across specialized vessels, port infrastructure, fabrication facilities, feeder barges, and other components of the domestic maritime supply chain.
“Offshore wind offers an opportunity for our state to grow a new clean energy industry that reduces pollution while creating jobs and investment for our people,” stated David Hochschild, Chair of the California Energy Commission.
“We will not allow the Trump administration's reckless actions to reverse our progress,” he added. “California's clean energy future is worth fighting for. See you in court.”