California Sues Over Invenergy Offshore Wind Lease Buyback Agreement

en.Wedoany.com Reported - On September 22, the California Attorney General's Office and the California Energy Commission filed a lawsuit against the U.S. Department of the Interior and Invenergy over an offshore wind lease exit agreement, with the defendants including relevant federal government departments and Invenergy. The lawsuit concerns the OCS-P 0565 offshore wind lease held by Invenergy in the Morro Bay Wind Energy Area off California's central coast, and seeks court review and an order to block continued implementation of the agreement. California argues that the agreement violates the Outer Continental Shelf Lands Act, the Administrative Procedure Act, the Coastal Zone Management Act, the National Environmental Policy Act, and federal funding-related laws.

The U.S. Department of the Interior announced the agreement with an Invenergy affiliate on June 17. According to Interior Department disclosures, Invenergy will voluntarily terminate four offshore wind leases located in the New York Bight, off California's central coast, and in the Gulf of Maine, involving original lease amounts totaling $765 million, and will redirect corresponding-scale funds to U.S. natural gas power generation and geothermal projects. California's lawsuit concerns the Morro Bay lease among them; the state government disclosed that federal returned funds exceed $111 million, while requiring the Invenergy affiliate to invest an equal amount in fossil energy or geothermal projects outside California.

The OCS-P 0565 lease was acquired by Invenergy California Offshore LLC in December 2022 in the United States' first California offshore wind lease auction, with a lease area of 80,418 acres and a winning bid of $145.3 million. The lease is located in the Morro Bay Wind Energy Area and took effect on June 1, 2023. The U.S. Bureau of Ocean Energy Management at the time offered a total of five offshore wind lease areas in California, with a total area of approximately 373,300 acres and planned potential exceeding 4.6 GW.

Before formally filing the lawsuit, California sent a notice of intent to sue to the U.S. Department of the Interior and Invenergy on July 16, giving a 60-day cure period. This lawsuit continues that process, with the core disputes centering on whether the federal government can cancel the lease through the agreement, return the relevant lease funds, and whether the agreement process satisfies legal requirements for state government participation, environmental review, and federal fiscal payments. The above claims of illegality are currently California's legal arguments in the litigation, and the case still needs to be decided by the court.

This is also California's second lawsuit in 2026 concerning the Morro Bay offshore wind lease buyback. On August 28, California already sued the U.S. Department of the Interior and related companies over the exit agreement for the OCS-P 0564 lease held by Golden State Wind, which involves the return of approximately $120 million in lease funds. On September 1, California also issued a notice of intent to sue regarding another offshore wind lease exit agreement involving an RWE affiliate.