California Sues Over the $120 Million Deal That Paid a Developer to Abandon Its Morro Bay Wind Lease

California Attorney General Rob Bonta and the California Energy Commission sued the Trump administration and Golden State Wind LLC on Aug. 28, 2026 over the Interior Department's buyout of the company's offshore wind lease in the Morro Bay Wind Energy Area. Golden State Wind paid the United States $120 million for the lease at a 2022 auction, plus more than $30 million in commitments for workforce training and community benefits. Interior announced on April 27, 2026 that it would terminate the lease through an agreement the state describes as settling litigation the company never filed, reimbursing the $120 million from the federal Judgment Fund in exchange for an equal investment in fossil-fuel projects.

California argues the deal violates the Outer Continental Shelf Lands Act and the Judgment Fund Act, contending that a fund reserved for paying judgments and settlements cannot be used where no legal claim existed. The suit asks the court to strike the agreement down. It follows earlier state actions, including an Energy Commission subpoena in May and a notice of intent to sue in June.

The case is pending. The administration has not responded in court, and no judge has ruled on the state's claims.