California Sues Interior Department, Challenging Buyback of 2GW Offshore Wind Lease

en.Wedoany.com Reported - On August 28, the Office of the California Attorney General and the California Energy Commission filed a lawsuit in the U.S. District Court for the Northern District of California, challenging the lease termination agreement reached between the U.S. Department of the Interior and Golden State Wind for offshore wind lease area OCS-P 0564 off California's central coast. Defendants in the case include the U.S. Department of the Interior, the Bureau of Ocean Energy Management, relevant Department of Justice officials, and Golden State Wind. The lawsuit seeks judicial review of the relevant federal administrative actions, as well as declaratory and injunctive relief.

The disputed agreement was reached on April 27. According to information published by the U.S. Bureau of Ocean Energy Management, the Department of the Interior will cancel and revoke lease OCS-P 0564 only after Golden State Wind completes the agreed investment in U.S. oil and gas projects. California stated in its complaint that the federal government plans to pay Golden State Wind $120 million through the Judgment Fund, while requiring the company to invest an equivalent amount in other U.S. oil and gas development projects. California has raised objections to the legality of this funding arrangement and the lease cancellation process.

OCS-P 0564 is located in California's Morro Bay Wind Energy Area. Golden State Wind acquired the lease area in December 2022 at the first offshore wind lease auction on the U.S. West Coast, with a total bid of $150.3 million, comprising approximately $120.24 million in cash bids and approximately $30.06 million in credits for workforce training and supply chain investment. The lease area covers 80,418 acres, with a planned maximum installed capacity of approximately 2GW for floating offshore wind.

Golden State Wind is currently owned 50% each by Ocean Winds and Reventus Power, with management led by Ocean Winds. The project lease area is located approximately 22 miles from the California coast at its closest point, with water depths ranging from approximately 951 meters to 1,328 meters. The project has previously carried out preliminary development work such as seabed geophysical surveys, but has not yet submitted a Construction and Operations Plan to the U.S. Bureau of Ocean Energy Management, and the project has not entered the offshore wind turbine construction phase.

California sent a notice of intent to sue to the U.S. Department of the Interior on June 23 regarding the Golden State Wind lease agreement. Previously, in May, the California Energy Commission issued an administrative investigative subpoena to Golden State Wind, requesting documents and information related to the lease exit agreement. After completing the statutory notice procedures, California formally filed this lawsuit on August 28. Court records show the case number is 4:26-cv-09123, with the initial case management conference currently scheduled for December 1.

In the lawsuit, California also detailed its related investments in offshore wind development, including ports, transmission facilities, workforce training, and supply chain projects. The Office of the California Attorney General stated that commitments related to the Golden State Wind bid for workforce training, supply chain development, and community investment exceed $30 million; California's prior public investments supporting the state's offshore wind development have exceeded $100 million. These investments and the state government's interests in lease development constitute one of the matters raised in this lawsuit.