Federal buyouts of offshore wind leases tied to the Morro Bay Wind Energy Area are escalating into a broader legal fight between California and the Trump administration, as state officials prepare to sue and expand investigations into multiple Central Coast wind project cancellations.
Susan Callery, offshore wind coordinator for the SLO Climate Coalition, said the cancellations mark a significant setback for regional planning efforts that have been underway for years.
“The federal government’s using taxpayer dollars to buy back offshore wind leases,” Callery said. “And California’s already invested millions of dollars, and I don’t know how many hours of planning and time and effort they’ve spent to prepare for these projects.”
“And we’re wasting public money to cancel these projects,” she added. “And that’s a job and economy killer.”
On June 23, California Attorney General Rob Bonta and California Energy Commission Chair David Hochschild issued a Notice of Intent to Sue the U.S. Department of the Interior, challenging its agreement with Golden State Wind LLC over a canceled offshore wind lease in federal waters off Morro Bay.
The state alleges that the agreement violates the Outer Continental Shelf Lands Act and improperly terminates a lease tied to more than $100 million in public investments in offshore wind planning, port readiness, and transmission infrastructure.
“California won’t stand idly by as the Trump administration illegally strikes deals to kill offshore wind projects and replace them with more windfalls for his fossil fuel friends,” Bonta said in a statement.
The notice begins a 60-day period for the federal government and Golden State Wind to respond before California may file suit.
The legal challenge comes amid a second offshore wind cancellation involving Invenergy, which the U.S. Department of the Interior said agreed on June 17 to relinquish four offshore wind leases, including a proposed Morro Bay-area project, in exchange for a $765 million federal payout and equivalent investment in fossil fuel and geothermal projects.
The National Wildlife Federationsaid the Invenergy agreement is the third offshore wind lease buyout since March, bringing total federal spending on canceled wind projects to roughly $2.6 billion nationwide.
California Energy Commission (CEC) officials said the Central Coast is especially vulnerable, as Morro Bay has been identified as a key hub for offshore wind development.
“If allowed to proceed, the lease buyout threatens to set back California’s burgeoning offshore wind industry by years,” the CEC said in a June 23 statement.
The CEC has opened investigations into both Golden State Wind and Invenergy, issuing administrative subpoenas seeking documents related to negotiations, legal justification, and the impacts of the agreements. The agency first subpoenaed Golden State Wind in May after its initial lease cancellation agreement.
California has invested more than $100 million in offshore wind preparation, including port upgrades, transmission planning, and workforce development, much of it concentrated along the Central Coast. The CEC warns that those investments could be jeopardized if offshore wind development is halted.
The U.S. Department of the Interior has not publicly detailed the legal basis for the buyback agreements.
California is continuing to seek records and prepare for litigation as the 60-day notice period proceeds. ∆
This article appears in June 25 – July 2, 2026.
