$120m wind lease fight: California sues Trump over offshore U-turn
State challenges $120m reimbursement deal that scraps 2 GW floating wind farm off Morro Bay
California has taken legal action against the Trump administration and offshore wind developer Golden State Wind over the cancellation of a major floating wind lease off the state’s Central Coast. The lawsuit, filed in federal court by Attorney General Rob Bonta and the California Energy Commission, challenges an April agreement that allowed the developer to relinquish its 2 GW Morro Bay lease in exchange for a $120 million reimbursement.
Golden State Wind, a joint venture between Ocean Winds and Reventus Power, originally secured the lease in a 2022 federal auction for $120 million. The consortium had committed over $30 million to workforce training, supply-chain development, and community initiatives, with plans to develop a 2 GW floating offshore wind project in the region.
Legal dispute over reimbursement terms: California
The state argues that the reimbursement deal violates federal laws, including the Outer Continental Shelf Lands Act and the Judgment Fund Act. Under the agreement, the $120 million reimbursement would come from the federal Judgment Fund, while Golden State Wind would redirect an equivalent amount toward conventional energy projects outside California.
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In a June statement, Attorney General Bonta criticized the arrangement, calling it a “backroom buyout” that undermines clean energy progress. “At a time when the country needs more reliable and sustainable power, the Trump administration is using taxpayer money to cancel offshore wind projects and replace them with windfalls for fossil fuel interests,” he said.
The Department of the Interior has defended the deal, stating it was approved by the Department of Justice and followed proper procedures. However, California’s legal challenge seeks to invalidate the agreement, which the state claims jeopardizes its energy policy and over $100 million in planned investments.
Broader implications for U.S. offshore wind
The Morro Bay dispute is part of a larger trend under the Trump administration, which has negotiated similar reimbursement deals with other offshore wind developers. These agreements, totaling nearly $2.6 billion, have canceled projects in California, the New York Bight, and the Gulf of Maine in exchange for reinvestment in other energy sectors.
California Energy Commission Chair David Hochschild condemned the policy shift, stating, “To turn away from innovation and revert to outdated energy strategies is not just bad for California—it’s bad for the nation.”
The lawsuit remains unresolved, with the federal government and Golden State Wind yet to respond. If successful, the legal challenge could force a reconsideration of the Morro Bay project and other canceled offshore wind leases.
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