California Attorney General Rob Bonta and the California Energy Commission (CEC) notified the Trump administration on September 1 that they intend to sue over the cancellation of a federal offshore wind lease capable of supporting up to 1.6 gigawatts off Humboldt County.
The action challenges the California portion of a $1.22 billion settlement between the U.S. Department of the Interior and RWE U.S. Offshore covering three offshore wind leases. California alleges that federal officials violated the Outer Continental Shelf Lands Act by failing to follow statutory procedures for canceling the lease.
The notice of intent to sue gives the federal government 60 days to address the alleged violations before California may file a lawsuit.
Which Humboldt offshore wind lease is affected?
The dispute involves federal lease OCS-P 0561 in the Humboldt Wind Energy Area off California’s North Coast.
RWE acquired the 63,338-acre lease in the federal government’s 2022 California offshore wind auction and assigned it to its Canopy Offshore Wind subsidiary in 2024. The area was expected to support up to 1.6 gigawatts of floating offshore wind generation.
RWE paid approximately $157.7 million for the lease. The bid included $36.4 million in credits for workforce training, domestic supply-chain development and community benefits.
How the RWE offshore wind settlement works
RWE announced on August 6 that it had reached a $1.22 billion settlement with the Interior Department covering leases off California, Louisiana and New York.
Under the California portion, Canopy or its affiliates would invest approximately $121.3 million in other domestic energy projects. The federal government would then reimburse Canopy for the same amount and cancel the Humboldt lease.
RWE separately announced a $900 million investment for an indirect 16% interest in the Louisiana LNG project and a $300 million agreement to reserve natural-gas turbines for a planned portfolio of 15 generating projects.
RWE said it concluded that its offshore wind projects had no foreseeable path to federal permits and that the settlement would allow it to redirect capital toward projects with greater development certainty.
California alleges violations of federal offshore-energy law
California contends that the Interior Department violated the Outer Continental Shelf Lands Act by cancelling the lease without first holding a hearing or suspending it for five years. The state also alleges that federal officials failed to coordinate with affected governors, follow lease-relinquishment regulations, or consider the statutory factors governing offshore energy development.
California contends that the Interior Department cannot cancel the lease through the negotiated agreement without complying with the Outer Continental Shelf Lands Act and its implementing regulations.
California also argues that the proposed $121.3 million reimbursement exceeds the compensation permitted under federal law.
California cites offshore wind investments and targets
California says it has invested more than $100 million in ports, transmission planning and other infrastructure intended to support offshore wind development.
The state’s strategic plan calls for as much as 25 gigawatts of offshore wind capacity by 2045, which the CEC estimates could provide approximately 13% of California’s electricity. Cancellation of the Humboldt lease reduces the federal acreage available to support that goal and creates additional uncertainty for planned port and transmission investments on the North Coast.
California expands its offshore wind legal challenges
The Humboldt notice is California’s third formal legal challenge to federal agreements involving offshore wind leases off the state’s coast.
California has also challenged agreements involving Golden State Wind and Invenergy in the Morro Bay Wind Energy Area. On August 28, the state filed a lawsuit seeking to block the Golden State Wind lease cancellation and a related $120.24 million federal payment.
The Humboldt dispute could test whether the Interior Department may use negotiated settlements to terminate offshore wind leases without following the suspension, consultation and cancellation procedures California says federal law requires.