California has initiated legal action against the Trump administration and Golden State Wind following a federal agreement to cancel an offshore wind lease off the state’s Central Coast.
The suit challenges an agreement the Department of the Interior (DOI) announced in April 2026. Under the agreement, Golden State Wind could recover the $120m it paid in lease fees after making an equivalent investment in oil and gas assets along the Gulf Coast.
The developer secured the lease in a 2022 federal auction for offshore wind development in the Morro Bay Wind Energy Area.
According to the DOI, Golden State Wind will not pursue any future offshore wind projects in the US.
California requests that the agreement be nullified, alleging that the DOI exceeded its authority under the Outer Continental Shelf Lands Act and that the deal violates the Judgment Fund Act as the $120m payment was not part of settling an existing suit.
Attorney General Rob Bonta and the California Energy Commission (CEC) argue that cancelling the lease could undermine progress towards the state’s target of developing 25GW of offshore wind power by 2045, which could power up to 25 million homes and supply around 13% of the state’s electricity.
The state asserts offshore wind cancellations could put over 174,750 jobs at risk, adding that it has already invested more than $100m in ports, transmission systems and related infrastructure to support planned projects. Golden State Wind had also pledged $30m towards workforce development and supply chain initiatives in the region upon winning the lease in 2022.
Although the developer had not yet submitted a full construction and operations plan for review, California claims that the cancellation was unjustified after federal approval of the lease area and years of consultation with the Department of Defense.
Attorney General Bonta said: "The Trump Administration’s backroom buyout with Golden State Wind to stop offshore wind development in favour of gas and oil drilling is, unfortunately, a classic playbook for them to line the pockets of their Big Oil donors.
"Let’s be clear: California will continue to aggressively fight back against the Trump administration's outrageous abuse of taxpayer dollars to abandon offshore wind investments that could have delivered union-paying jobs and reliable clean energy to Californians."
The CEC subpoenaed documents relating to the agreement in May 2026. California subsequently issued a Notice of Intent to sue in June, giving the DOI and Golden State Wind 60 days to cancel the buyout.
The agreement is part of the Trump administration's broader efforts to redirect investment from offshore wind towards fossil fuel projects. The DOI reached similar deals with other developers such as Bluepoint Wind and TotalEnergies, some of which have also faced legal backlash.
