Under the settlement agreement announced on June 17, 2026, the U.S. Department of the Interior will unlawfully reallocate more than $111 million in federal taxpayer dollars to pay Invenergy to abandon its lease in the Morro Bay Wind Energy Area off the Central California coast. The buyout also requires the company to cause its corporate affiliates to invest the same amount in out-of-state fossil fuel or geothermal projects that will do nothing to support California’s energy economy.
If allowed to proceed, the taxpayer-funded buyout threatens to set back California’s offshore wind industry, undermining public investments in ports’ offshore wind capacity and damaging supporting industries and clean energy jobs that support working families.
In the lawsuit, California argues that DOI’s buyout deal with Invenergy violates the Constitution and numerous federal laws, including the Administrative Procedure Act (APA), Coastal Zone Management Act, National Environmental Policy Act (NEPA), Judgment Fund Act, and Outer Continental Shelf Lands Act (OCSLA), which is intended to give California a say in the offshore wind leasing program.
“At a time when we need more reliable, clean energy, President Trump is trying to send $111 million to his fossil fuel industry friends and wants taxpayers and working families to cover the tab. This outrageous abuse of taxpayer dollars will damage the offshore wind industry and create unnecessary obstacles to clean and reliable energy powering our homes and economies,” said AG Rob Bonta. “During Climate Week and all year round, we’re focused on sustainable energy, mitigating environmental impacts, and taking action when our clean energy future is attacked. California is not here to foot the bill — we have the receipts and we’re asking the court to strike down this blatantly unlawful deal.”
In the lawsuit, California alleges that DOI’s buyout deal with Invenergy violates numerous federal laws, including the OCSLA and APA, because it uses a sham settlement to bypass the rules that Congress set down for the offshore energy leasing program, including stakeholder participation rights for affected states like California and a cap on how much the government can pay to a developer when it cancels a lease. California also argues that the deal violates the Judgment Fund Act, federal funding laws, and the Constitution because the $111 million payment was not a settlement to resolve an existing lawsuit.
The attorneys general of New York, Connecticut, Delaware, Maine, Massachusetts, New Jersey, Rhode Island, and Vermont also filed two joint lawsuits today challenging additional lease buyouts. First, the states filed suit challenging lease buyouts between DOI and Invenergy subsidiaries that were announced at the same time as the California Invenergy buyouts and cover three leases off the coasts of New York, New Jersey and Maine at a total cost of over $653 million. The east coast states also filed a second suit challenging a $765 million lease buyout between DOI and Bluepoint Wind, LLC concerning a lease off the coast of New York and New Jersey.
