California takes the Morro Bay cancellation to federal court
OAKLAND, Calif. — California filed a federal lawsuit Friday challenging a Trump administration agreement that canceled a planned floating offshore wind project off the Central Coast and offered the developer as much as $120 million in federal reimbursement.
Attorney General Rob Bonta and the California Energy Commission filed the complaint in the U.S. District Court for the Northern District of California against the U.S. Department of the Interior, federal officials and Golden State Wind LLC. The state is asking a judge to declare the cancellation unlawful and set it aside.
The lawsuit marks the beginning of a court fight, not a ruling that the administration broke the law. California's claims remain allegations that the federal government and the developer will be able to contest in court.
Read the source: California Attorney General: Announcement and summary of the lawsuit ↗
A $120 million lease—and a matching fossil-fuel commitment
Golden State Wind paid the federal government $120 million in a 2022 auction for Lease OCS-P 0564 in the Morro Bay Wind Energy Area. The company had been planning a 2-gigawatt floating wind project and had committed more than $30 million to workforce training, supply-chain development and community benefits, according to the complaint and the attorney general's office.
Interior announced the cancellation agreement on April 27. Under the deal described by the state and Reuters, the federal government would reimburse Golden State Wind for up to the amount it paid for the lease after an affiliate invested an equal amount in U.S. oil-and-gas assets, energy infrastructure or liquefied-natural-gas projects along the Gulf Coast.
The planned turbines had not been constructed and the project was not generating electricity. Canceling a lease eliminates a proposed development opportunity; it is not the shutdown of an operating California wind farm.
Read the source: Federal complaint: California v. U.S. Department of the Interior ↗
Why California says the agreement is illegal
California alleges Interior bypassed procedures imposed by the Outer Continental Shelf Lands Act, including requirements governing when and how an offshore lease can be suspended or canceled and how affected states participate. The complaint also raises claims under the Administrative Procedure Act, the Judgment Fund Act, the National Environmental Policy Act and the Coastal Zone Management Act.
A central dispute involves the federal Judgment Fund, which Congress created to pay qualifying court judgments and settlements. California argues the $120 million payment cannot lawfully come from that fund because Golden State Wind had not filed a lawsuit for the agreement to settle and because the arrangement allegedly sidestepped the compensation formula that normally applies to canceled offshore leases.
The complaint further alleges that Interior did not adequately explain its change in policy, consider California's financial and environmental interests or complete required consultation. Those are the state's legal contentions; the court has not yet decided whether any statutory or procedural violation occurred.
Read the source: Reuters: California sues over offshore wind lease cancellation ↗
Interior says the deal followed appropriate channels
An Interior Department spokesperson told Reuters that the agency would not comment on pending litigation but said the agreement had been approved by the Department of Justice and went through appropriate channels. That is the administration's clearest response to the newly filed case.
Interior previously tied the cancellation to national-security concerns and presented the conventional-energy investment as part of President Trump's energy agenda. California disputes that justification, arguing federal agencies had already reviewed the lease area through years of analysis and coordination that included the Department of Defense.
Golden State Wind is a joint venture involving Ocean Winds and Reventus Power. Reuters reported that Ocean Winds was not immediately available to comment Friday. No new statement from the developer responding to the complaint was identified in the sources reviewed for this report.
Read the source: Bureau of Ocean Energy Management: Morro Bay Wind Energy Area ↗
What is at stake for California—and what comes next
California says it has invested more than $100 million in port readiness, transmission planning and other work intended to support offshore wind. Its strategic plan calls for as much as 25 gigawatts of offshore wind capacity by 2045, a target the state projects could supply roughly 13% of California's electricity. Those figures are planning goals and estimates, not existing generation.
State officials argue the cancellation threatens future union jobs, port investment and the ability to diversify California's power supply. The administration has emphasized national security, conventional-energy development and lower energy costs. The lawsuit places those competing policies before a federal judge but does not itself restore the lease.
The next steps will include service of the complaint and responses from the defendants. California may seek preliminary relief while the case proceeds, but the court had not issued an injunction or merits decision as of Friday afternoon. What’s the Scoop With Broach will update this report when the administration files its formal response or the court acts on the state's request.
Read the source: Wikimedia Commons: Morro Bay photograph, CC BY 2.5 ↗
Sources and further reading
California Attorney General: Announcement and summary of the lawsuit ↗
Federal complaint: California v. U.S. Department of the Interior ↗
Reuters: California sues over offshore wind lease cancellation ↗
Bureau of Ocean Energy Management: Morro Bay Wind Energy Area ↗