The California Energy Commission (CEC) is investigating a federal agreement with Golden State Wind that allows the developer to walk away from a major offshore wind project off the coast of Morro Bay.
On May 4, the CEC issued an administrative investigative subpoena to Golden State Wind LLC seeking documents and communications related to the company’s agreement with the U.S. Department of the Interior to relinquish its offshore wind lease. The deal allows the company to recover about $120 million in lease fees—after originally paying roughly $150 million—if it invests an equal amount in oil and gas assets, infrastructure, or projects along the Gulf Coast.
In a letter accompanying the subpoena, the CEC said it is examining the “premature relinquishment of the lease” and “potential violations of law in connection with offshore wind lease buyouts.”
The Interior Department announced the agreement on April 27, stating that “Golden State Wind has committed to voluntarily end its offshore wind lease” and would be eligible to recover “approximately $120 million in lease fees” under those conditions. The company has also indicated it does not plan to pursue additional offshore wind projects in the United States.
The lease, awarded in December 2022 through a competitive auction conducted by the Bureau of Ocean Energy Management, covers roughly 80,000 acres in federal waters off Morro Bay. The project had been expected to generate “up to 2 gigawatts (GW) of clean offshore wind energy” and help California meet its goal of 100 percent clean electricity by 2045.
Instead, the CEC said the buyout threatens to unravel years of planning and investment and lacks legal precedent.
According to the subpoena, California has spent more than $100 million preparing for offshore wind development, including funding port upgrades, transmission planning, and new technologies. Those investments, the CEC said, were made “in reliance on commitments by Golden State Wind and other companies.”
The agency added that the company’s financial commitments—covering workforce training, supply chain development, and community benefits—“must be paid back if the company forfeits its lease.”
CEC Chair David Hochschild criticized the agreement 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.”
The subpoena requires Golden State Wind to turn over extensive records, including internal communications, correspondence with federal officials, and documents related to negotiations over the lease cancellation. It also seeks materials related to potential litigation, coordination with other developers, and any national security considerations tied to the project.
In a separate letter, the office of California Attorney General Rob Bonta notified the company that the state anticipates potential litigation involving the federal government and parties to similar lease buyouts. The letter emphasized that such agreements could impact California’s energy needs and offshore wind programs.
As part of that notice, the state issued a litigation hold, requiring Golden State Wind to preserve all relevant records.
“Once a party reasonably anticipates litigation, it must take steps to preserve relevant evidence,” the notice states.
The directive instructs the company to suspend routine document destruction and retain all hard-copy and electronic materials, including emails, text messages, and archived data. Failure to comply could constitute “spoliation of evidence,” potentially resulting in legal sanctions.
“I am outraged by this backwards decision to sabotage the Morro Bay Wind Energy Area,” U.S. Rep. Salud Carbajal (D-Santa Barbara) said in an April 28 statement. “The projects strengthened our energy security, boosted local economic growth, and advanced important environmental protections. Because of a bizarre personal vendetta against wind energy, Donald Trump’s administration is turning a historic opportunity into a historic failure.” ∆
This article appears in Best of SLO County 2026.
Not one word of Salud Carbajal’s rant is actually accurate. In fact the opposite is true. As a U.S. congressman he has violated his commitment in his moral and fiduciary responsibility to Californians and the American people by promoting the use of taxpayer money to fund a net loss investment like offshore wind energy. The true cost of these projects far exceed any benefit. The legal voters expect and require our representatives to invest our money wisely. Salud is unable to meet this requirement and should be remove from office.
Please back up your assertion with data.