California sues Trump administration, developer over deal to walk away from Morro Bay wind power

Blanca Begert, Los Angeles Times on Aug 28, 2026

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After the Trump administration paid California offshore wind developers to abandon their leases and pursue oil and gas development instead, the state is fighting back.

In a lawsuit filed Friday in U.S. District Court for the California Northern District, state Attorney General Rob Bonta and the California Energy Commission allege that one of the deals violates federal law and constitutes an illegal payout.

“The Trump Administration’s backroom buyout with Golden State Wind to stop offshore wind development in favor of gas and oil drilling is, unfortunately, a classic playbook for them to line the pocket of their Big Oil donors,” Bonta said in a statement.

Offshore wind is central to California’s clean energy plans. The state has a goal to develop 25 gigawatts of offshore wind power by 2045, enough to provide about 13% of its electricity supply.

Golden State Wind, off Morro Bay, was expected to generate up to 2 gigawatts of clean energy, enough to power about 1.1 million homes, according to the developer. The U.S. Department of the Interior said in April that it would pay the developer $120 million, the amount Golden State Wind had paid for its offshore lease, if the company invested in oil and gas projects along the Gulf Coast instead.

The move followed similar deals with other U.S. offshore wind projects, and this summer the administration announced agreements with two other companies seeking to develop offshore wind in California. Invenergy will get $765 million to abandon four leases including one off Morro Bay, and RWE struck a deal for $1.22 billion to cancel leases including one near Humboldt. The agreements left California with just two offshore wind leases intact.

The state says it has invested more than $100 million already to prepare ports, transmission systems and industries to support the offshore wind and the buyouts are a waste of taxpayer money. Environmental groups decried the lost clean power and jobs, which Bonta said would number over 170,000.

In May, the California Energy Commissions served Golden State Wind with a subpoena seeking information on the buyout. It also filed a Notice of Intent to Sue over the Invenergy agreement.

In the lawsuit Friday over Golden State Wind, California argues the deal violates the Outer Continental Shelf Lands Act, which gives California input into offshore leasing decisions. It also argues that the buyout illegally takes money from a federal fund meant to settle lawsuits.

So far, the Trump administration has paid out nearly $4 billion for the cancellation of at least a dozen federal wind leases across the country. All of the companies have agreed to invest in U.S. fossil fuel projects.

A group of seven states is also suing over a deal with energy developer TotalEnergies on the East Coast.

Golden State Wind did not respond immediately to a request for comment. The Department of the Interior said it would not comment due to pending litigation.

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Times staff writer Hayley Smith contributed to this report.

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