SACRAMENTO — California Attorney General Rob Bonta and the California Energy Commission filed a lawsuit Friday challenging a federal agreement that canceled an offshore wind lease off the state’s central coast, saying the Trump administration abused its authority and diminished the value of private leases before offering developers a buyout.
State describes buyback as coercive
The lawsuit contests a so-called "buy back" arrangement reached in April between the federal government and the developer of Golden State Wind for the Morro Bay lease area identified as OCS-P 0564. According to the complaint, the lease had an estimated installation capacity of about 2 gigawatts.
The winning auction bid for that lease was reported at $150.3 million, submitted by a partnership between the Canada Pension Plan Investment Board and Ocean Winds, a joint venture owned by Engie and EDP Renewables. The state says the developers and the federal government later agreed to cancel the lease in exchange for $120 million.
“This ‘TotalEnergies model’ of buyout operates with the cynical logic of an extortion racket,”
The lawsuit explicitly invokes a prior federal arrangement, beginning in March, in which TotalEnergies agreed to relinquish two offshore leases off the coasts of North Carolina and New York — with a combined capacity of about 4.2 GW — for $928 million. California argues the same pattern is being used off its coast.
Legal theory and alleged conduct
In its filing, California alleges the federal government first took actions that reduced the value of the lease holdings, then offered developers restitution or cancellation payments that the state says functioned as an "unrefusable offer" given investors’ fiduciary responsibilities. The complaint asserts the administration "abuses its authority" by diminishing lease value and then negotiating buybacks.
The state named both the federal administration and the Golden State Wind developer in the lawsuit. The complaint seeks to challenge the buyback agreement itself and the processes used to reach it, arguing the conduct undermines the integrity of federal offshore leasing and harms California's interest in deploying offshore wind.
What the public record shows
Published records indicate:
- Lease: OCS-P 0564 (Morro Bay)
- Estimated capacity: ~2 GW
- Winning bid: $150.3 million (Canada Pension Plan Investment Board + Ocean Winds)
- Buyback payment reported: $120 million
- Prior federal buyback example: TotalEnergies deal, two leases (4.2 GW) for $928 million
| Item | Detail |
|---|---|
| Lease area | OCS-P 0564 (Morro Bay) |
| Estimated capacity | ~2 GW |
| Winning bid | $150.3 million |
| Reported cancellation payment | $120 million |
State stakes and possible consequences
California’s legal action raises questions about federal oversight of offshore energy leasing, how lease values are protected, and whether buyback agreements set precedents that could affect future investment in ocean-based renewable projects. The state framed the lawsuit as a defense of the auction process and an effort to prevent what it characterizes as coercive federal tactics that could chill private investment in offshore wind.
The developer named in the suit, Golden State Wind, and federal officials have not been quoted in the public report summarizing the filing. The complaint follows other high-profile federal buybacks, signaling a broader dispute between state officials seeking renewable development off their coasts and a federal administration that has pursued cancellation payments in multiple regions.
Implications for California’s energy planning
California officials have emphasized offshore wind as a potential contributor to coastal and statewide clean energy portfolios. The litigation could affect timelines for projects proposed off the state’s central coast and may shape how private investors view federal auction and cancellation risk going forward.
The lawsuit is the latest episode in an evolving conflict over federal lease management and the role of large-scale purchase agreements in reshaping the offshore wind landscape. How courts interpret the state’s claims may influence whether federal authorities continue to rely on buyback models or adjust their approach to balancing leaseholder interests, environmental review and political considerations.
Kevin Nakamura, WE NEWS state correspondent.
