California filed a federal lawsuit September 22, 2026 seeking to block the Trump administration’s agreement to pay Invenergy $111.8 million in connection with the cancellation of its offshore wind lease near Morro Bay. The case follows California’s August 28 challenge to a separate agreement involving Golden State Wind’s Morro Bay lease.
California’s latest complaint challenges a June 17 agreement under which the Interior Department would provide Invenergy more than $111 million after the company “voluntarily terminate[s]” four offshore wind leases, including OCS-P 0565 in Morro Bay. Invenergy’s corporate affiliates would make qualifying investments in other energy projects, and the federal government would pay Invenergy an equivalent amount from the Judgment Fund. The Department of the Interior officially canceled the lease on July 10, 2026.
California alleges that the agreement and cancellation bypassed procedures under the Outer Continental Shelf Lands Act, including provisions giving affected states a role in federal offshore-energy decisions. The state also argues that the Judgment Fund cannot be used for the payment because the agreement did not settle an existing or imminent lawsuit. Rather, it addressed claims Invenergy might have brought had the federal government issued a suspension order.
California is asking the U.S. District Court for the Northern District of California to invalidate the agreement and prevent its implementation.
Invenergy won the lease in the federal government’s 2022 California offshore wind auction. Its $145.3 million bid included approximately $33.5 million in commitments for workforce training, supply-chain development, and community benefits. The lease was one of five offshore wind developments proposed for California federal waters, with two leases in Humboldt and three in Morro Bay.
The federal government has since moved to unwind multiple offshore wind leases.
The case adds to litigation over federal agreements to end California offshore wind leases. Its outcome could affect the Invenergy lease and the federal government’s ability to use similar agreements for other California leases.