California Subpoenas Developer After Trump Administration Pays $120 Million to Kill Offshore Wind Project
The Interior Department paid Golden State Wind $120 million to abandon its Morro Bay lease; California subpoenaed the developer and its attorney general anticipates litigation.
Editor's Note ·
- Correction:
- The article states that Liz Klein 'called it reckless, expensive, and irresponsible.' The phrase 'reckless, expensive, and irresponsible' was spoken by an Interior Department spokesperson (as quoted in Utility Dive), not by Klein. Klein described the arrangement as 'illegal' with 'no legal basis' — language the article correctly quotes in the same sentence. The Interior Department spokesperson's characterization of offshore wind projects was misattributed to Klein, a critic of the administration's buyout program.
Overview
The California Energy Commission subpoenaed Golden State Wind on May 4, 2026, demanding records about the company’s agreement with the U.S. Department of the Interior to abandon a floating offshore wind project off the state’s Central Coast — a deal in which the federal government agreed to pay out approximately $120 million in taxpayer funds to end the lease. The action is part of a broader Trump administration campaign that has now committed roughly $1.8 billion to retire four offshore wind leases totaling around 8.6 gigawatts of potential capacity, according to Utility Dive.
The Golden State Wind Deal
On April 27, 2026, the Interior Department announced that Golden State Wind had agreed to voluntarily relinquish Lease OCS-P 0564 in the Morro Bay Wind Energy Area off the Central California coast, according to Utility Dive. The project had been planned to supply electricity to approximately 1.1 million homes and was projected to create roughly 8,000 high-road jobs, according to the Environmental Defense Fund.
Golden State Wind is co-owned by Canada Pension Funds Investment Board and Ocean Winds, a joint venture of Engie and EDP Renewables, as Utility Dive reported. Under the terms of the agreement, the company will receive approximately $120 million in recovered lease fees contingent on making an equivalent investment in oil and gas projects outside California, according to the National Wildlife Federation. The company is also required to forgo future U.S. offshore wind projects, according to the California Energy Commission.
California had already made material financial commitments tied to the project. The state invested $24 million in workforce training and domestic supply chain development, and separately committed $6 million in Lease Use Area Community Benefits Agreements, according to Utility Dive.
California’s Legal Response
The California Energy Commission issued its administrative investigative subpoena on May 4, 2026, seeking the full terms of Golden State Wind’s agreement with the Interior Department, all related communications, and any litigation-related correspondence dating from January 20 onward, according to the CEC’s official press release.
“Californians deserve immediate answers about the nature of this payout,” CEC Chair David Hochschild said. “Taxpayer dollars should be used to build a sustainable energy future, not to pay to make projects disappear.”
Hochschild separately characterized the administration’s conduct as reckless, telling KPBS: “The Trump administration is recklessly spending billions of taxpayer dollars on backroom deals that would turn back the clock on innovation.”
California Attorney General Rob Bonta’s office stated it is investigating potential violations of law in connection with the lease buyouts and anticipates potential litigation involving the federal government and the parties to the deals, according to KPBS.
The Broader Buyout Campaign
The Golden State Wind deal is the third major offshore wind lease buyout under the Trump administration. An earlier agreement with TotalEnergies, announced in March 2026, involved a $1 billion buyout covering two Atlantic coast leases, according to KPBS. A separate deal with Bluepoint Wind — which holds leases off New York and New Jersey — required Bluepoint’s co-owner Global Infrastructure Partners to commit $765 million into a Texas liquefied natural gas facility in exchange for the lease reimbursement, according to Utility Dive and the National Wildlife Federation.
Similar buyouts were also made with Attentive Energy and Carolina Long Bay, as Utility Dive reported. In total the administration has committed approximately $1.8 billion to retire the four lease sets, representing around 8.6 GW of potential capacity, according to Utility Dive.
The Interior Department has defended the deals, arguing they provide “dollar-for-dollar reimbursement” for projects it characterizes as “impractical to develop without relying on taxpayer subsidies,” according to Utility Dive. Interior Secretary Doug Burgum has been identified by KPBS as overseeing the buyout program.
Legal Questions
Former Interior Department officials have raised serious questions about the legality of the buyout mechanism. Liz Klein, former director of the Bureau of Ocean Energy Management, said the arrangement “is illegal” with “no legal basis” and called it “reckless, expensive, and irresponsible,” according to Utility Dive. She also warned: “You wouldn’t want to create a situation where you are allowing companies, for instance, to buy up leases for anti-competitive purposes.”
Tony Irish, former Interior Associate Solicitor, warned that the arrangements could enable “anyone who no longer believes in their investment to cut bait” and that the approach “removes the risk from the businesses and places it completely on the federal government,” Utility Dive reported.
“Rather than making energy more affordable, cleaner, and safer, they are forcing the hands of developers to abandon offshore wind energy for more oil and gas,” said Amber Hewett, senior director of offshore wind energy at the National Wildlife Federation, in a statement released by the NWF on April 27, 2026.
Michael Colvin, Director of the Environmental Defense Fund’s California Energy Program, argued: “Instead of allowing much-needed homegrown power to get built, the Trump administration is wastefully spending taxpayer money to pressure a company to walk away from it,” according to the EDF.
What We Don’t Know
Neither the full text of the agreement between Golden State Wind and the Interior Department nor the internal communications surrounding it have been made public. The CEC’s subpoena is aimed at obtaining those records. No legal challenge has been formally filed, though California’s attorney general has indicated litigation is expected. It remains unclear whether Congress will act to investigate the broader buyout program; Democratic lawmakers including U.S. Representatives Jared Huffman and Jamie Raskin have demanded information about at least one of the deals, according to KPBS.
California’s Offshore Wind Ambitions Persist
Despite the federal rollback, California has signaled it intends to press ahead with its offshore wind program. State goals under AB 525 call for 5 gigawatts of offshore wind capacity by 2030 and 25 gigawatts by 2045, according to CleanTechnica. The National Renewable Energy Laboratory estimates the state holds 200 GW of technically recoverable offshore wind resources.
California has committed $228 million as a first installment from Proposition 4’s $475 million voter-approved port infrastructure fund, and the CEC has separately issued a $42.75 million grant for upgrading five ports — Humboldt, Long Beach, Oakland, Richmond, and San Luis Obispo — to support offshore wind development, according to CleanTechnica. California is also the only West Coast state with offshore wind leases, according to the EDF.
Whether the CEC’s subpoena and the attorney general’s anticipated litigation will disrupt further buyouts — or recover any of the state’s prior investments — remains to be seen, as no legal challenge had been formally filed as of publication.