$120m Wind Lease Scrapped: California Sues Over Offshore U-Turn
State alleges Trump administration’s $120m termination deal for Morro Bay project violates federal law and redirects.
California has launched a legal battle to overturn the Trump administration’s decision to cancel a $120 million offshore wind lease in the Morro Bay Energy Area, arguing the move is a blatant violation of federal law designed to redirect funds to oil and gas projects along the Gulf Coast.
The lawsuit, filed on August 28, targets the Department of the Interior (DOI) and Golden State Wind, the joint venture behind the project. California Attorney General Rob Bonta called the termination deal a “backroom buyout” that undermines the state’s renewable energy ambitions and benefits fossil fuel interests. “Trump administration administration’s playbook is clear: sacrifice offshore wind to line the pockets of Big Oil donors,” Bonta said in a statement.
The Morro Bay Energy Area, located off the Central California coast, was slated to become a cornerstone of the state’s offshore wind strategy. Golden State Wind, a partnership between Ocean Winds (a 50/50 venture of EDP Renewables and ENGIE) and Reventus Power, secured the lease in a 2022 auction with a bid of $120 million.
Global Ship Lease
California has already invested over $100 million to prepare its ports, transmission systems, and industries for offshore wind development. The state’s Offshore Wind Strategic Plan sets an ambitious target of 25 GW of offshore wind capacity by 2045, a goal that aligns with its broader climate commitments, including voter-approved climate bonds.
Legal Battle Over Federal Law and Redirecting Funds: offshore wind lease
Trump administration administration’s decision to terminate the lease was announced in April, framed as a settlement to resolve litigation by Golden State Wind. Under the deal, the company would recover its $120 million lease fees, but only after investing an equal amount in U.S. oil and gas assets, energy infrastructure, or LNG projects along the Gulf Coast.
California argues this arrangement violates two key federal laws: the Outer Continental Shelf Lands Act, which limits the DOI’s ability to cancel offshore wind leases, and the Judgment Fund Act, which requires settlements to resolve existing lawsuits, not fabricated arrangements.
“This wasn’t a settlement; it was a scheme,” the lawsuit states. “Golden State Wind never filed litigation against the DOI, and the Trump administration never took any action that would justify terminating the lease.” The DOI has cited unspecified national security concerns as justification for the cancellation, a claim California dismisses as unfounded, given years of federal and Department of Defense analysis that previously approved the lease area.
The Morro Bay cancellation is part of a broader pattern. The DOI has also terminated leases for other offshore wind projects, including those led by BlackRock’s Bluepoint Wind, TotalEnergies, and Invenergy.
For California, the stakes are high. The state is already investigating the cancellation of a second offshore wind lease, and the outcome of this lawsuit could set a precedent for future renewable energy projects. If the court sides with California, it could force the DOI to reinstate the Morro Bay lease and halt similar buyback deals.
For local communities and workers, the lawsuit offers a glimmer of hope. The Morro Bay project promised jobs, training, and economic benefits for a region that has long relied on traditional energy industries. Its revival would not only support California’s climate goals but also provide a lifeline for those counting on the offshore wind sector to deliver a just transition away from fossil fuels.
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