California officials have escalated their challenge to one of the Trump administration’s agreements aimed at shutting down an offshore wind development, moving from an investigation to a formal notice that the state intends to sue.
The dispute centers on Golden State Wind, a proposed floating offshore wind project off California’s central coast. On Tuesday, California sent the Department of the Interior a notice of intent to sue over the administration’s decision to buy back the project’s federal lease in exchange for a payment to the developer.
The California Energy Commission first opened the inquiry last month, when it served Golden State Wind with an administrative investigative subpoena seeking documents and information related to the company’s agreement with the federal government. The commission said it wanted records showing how the deal was negotiated and what representations the company made to Interior.
According to the state, Golden State Wind agreed to relinquish its offshore wind lease in the Morro Bay Wind Energy Area and forgo future offshore wind projects in the United States. In return, the company would receive about $120 million after making an equivalent investment in U.S. oil and gas projects outside California.
CEC Chair David Hochschild sharply criticized the arrangement in a statement, saying, “The Trump administration is recklessly spending billions of taxpayer dollars on backroom deals that would turn back the clock on innovation. Californians deserve immediate answers about the nature of this payout. Taxpayer dollars should be used to build a sustainable energy future, not to pay to make projects disappear.”
In its notice, California said the deal may violate federal law and undermine state investments in offshore wind. The state has spent more than $100 million over the past decade to help prepare ports, transmission lines and related infrastructure for offshore wind development.
The Trump administration has committed nearly $2.6 billion to agreements designed to persuade energy companies to abandon U.S. offshore wind ventures. Interior Secretary Doug Burgum has said the leases sold in 2022, during former President Joe Biden’s administration, were for projects that only made economic sense because of large taxpayer subsidies.
The administration turned to the buyout strategy after federal courts blocked President Donald Trump’s attempts to halt offshore wind development through executive action. So far, eight offshore wind projects have been stopped through such agreements.
The earliest of those deals, disclosed in March, provided French company TotalEnergies with nearly $1 billion, effectively reimbursing it for offshore wind leases off North Carolina and New York, so long as the company redirected that money into fossil fuel projects. In April, the administration announced deals with Golden State Wind and Bluepoint Wind worth nearly $900 million combined.
Golden State Wind and Bluepoint Wind are both tied to Ocean Winds. Golden State Wind is a joint venture involving Ocean Winds and the Canada Pension Plan Investment Board, while Bluepoint Wind is an offshore wind project in the early stages of development off New Jersey and New York.
Asked about the California subpoena, Ocean Winds said it does not comment on open or potential litigation.
Eddie Ahn, executive director of Brightline Defense, an environmental justice nonprofit that supports offshore wind development in California, said the investigation could lay the groundwork for legal action by the state to protect renewable energy plans, along with the thousands of jobs and millions of dollars in investment California had expected from the project.
California says it plans to sue in 60 days if the situation is not rectified. Congressional Democrats are also looking into the matter, with Rep. Jared Huffman of California and Rep. Jamie Raskin seeking information about the TotalEnergies agreement.