Trump Administration Facing Lawsuit Over Allegedly Illegal Deal with Wind Energy Company
SACRAMENTO, Calif. (KEYT) – The California Attorney General's Office informed the Trump Administration of its intent to sue over an allegedly illegal deal to terminate an offshore wind energy lease at the Morro Bay Wind Energy Area Thursday.
According to Thursday's Notice of Intent to sue issued to members of the Trump Administration, the latest deal to terminate an offshore wind energy lease with Invenergy California Offshore LLC. announced last month may violate the Outer Continental Shelf Lands Act.
"California's anticipated OCSLA [Outer Continental Shelf Lands Act] citizen suit will challenge the purported settlement agreement between the United States and Invenergy California Offshore LLC. announced on June 17, 2026, and the cancellation of offshore wind Lease OCS P0565, which is held by Invenergy, set out in that Agreement for failure to comply with obligations under OCSLA, its implementing regulations, and associated requirements," explained Thursday's letter.
This isn't the first offshore wind energy company to receive payments from the Trump Administration to not pursue their projects and not the first time that the Attorney General's Office has noted the potential violations of federal law in the deals.
In fact, a Congressional investigation alleging the violations of the Outer Continental Shelf Lands Act was announced in April of this year.
According to Ranking Member Huffman of the House Natural Resources Committee and House Judiciary Committee Ranking Member Raskin, the Trump Administration issued two payments totalling almost $1 billion to French energy giant TotalEnergies from the Department of the Treasury's Judgement Fund, an account created by Congress in 1956 to pay court-ordered judgements and settlements against the government.
The language used in each of the deals has notably similar wording including that each of the offshore wind energy companies make investments into oil and natural gas projects as well as the use of the Judgment Fund to process the payments.
"The monies refunded to developers were paid by developers; these are not taxpayer dollars," argued the Department of the Interior in response to Your News Channel's questions specifically about the origin of the payments to TotalEnergies.
Despite those claims, the Department of Treasury's Judgement Fund website states, "An agency may only ask for payment from the Judgment Fund if funds are not legally available to pay from the agency's own appropriations. If another source of funds exists to pay the award, the Judgment Fund cannot be used even if the other source does not have enough money. In that case, the agency with the other source of funds must ask Congress to appropriate more money for that other source."
"TotalEnergies' $928,333,333 bonus bid was deposited into the United States Treasury through DOI's [Department of Interior's] Office of Natural Resources Revenue," noted April's letter to French energy giant TotalEnergies by members of Congress. "Any obligation to return those funds belongs to the account that received them. Routing the payment through the Judgment Fund instead would unlawfully augment appropriation."
When Your News Channel reached out to the U.S. Department of the Interior for further details about the deals, it referred to the payments as "monies refunded" and "not taxpayer dollars" and that the "settlement" was "approved by the Department of Justice".
Those claims are now subject to multiple Freedom of Information Act requests filed by Your News Channel author including one that has already exceeded the statutory limits for a response.
According to the Department of the Treasury, it has no record of authorization from any other federal agency, including the Department of the Interior that it can not make the payments for any amount nor from the Attorney General or a designee for administrative payments in excess of $25,000.
Both of those forms of authorization are required by federal law to make the payments in the manner detailed in the deal with TotalEnergies.
The potential violations of federal law to make the payments disclosed by the Treasury Department this week is now being discussed for potential litigation in federal court between Your News Channel and congressional staffmembers.
"President Trump is committed to unleashing affordable, reliable American energy for our country’s communities and putting the American people first through common-sense action," argued Secretary of the Interior Doug Burgum. "The offshore wind leases were sold under the assumptions that taxpayers would indefinitely subsidize costly, unreliable projects and that no national security concerns were implicated - both assumptions have since been proven false. Under President Trump, companies are shifting investment back toward dependable, secure energy infrastructure that can power our economy and lower utility costs. We applaud Invenergy for recognizing the importance of baseload power and investing in energy solutions that deliver real benefits to American consumers."
The difference between categorizing the payments as a refund for a lease terminated by the federal government or a subsidized investment is already a serious legal question.
The Ranking Members argued that using the Judgement Fund, which is managed by the Treasury Department and funded by Congress, to settle, reimburse, or to subsidize a future investment, would violate the Constitution's appropriations clause as it was not funds approved by a vote in Congress.
"The constitutional stakes are greater than a single improper payment," stated the Ranking Member's April letter. "The Judgment Fund has no annual cap, and individual disbursements receive no congressional review. Congress designed it that way because court judgments are involuntary; if a judge orders the government to pay, then it must pay. However, that logic does not extend to voluntary deals the executive branch chose to enter, on terms it negotiated, with counterparties it selected. Applied to those transactions, the Judgment Fund becomes the ultimate political slush fund."
"[T]he agreement does not actually refund the bonus bid," the Ranking Members added. "It conditions payment on TotalEnergies making nearly $1 billion in fossil fuel investments by a date certain. A genuine refund returns what was received, unconditionally, upon a determination that the government improperly received or retained the original funds. DOI structured a directed subsidy in which the executive branch unilaterally committed federal funds to subsidize investment in fossil fuel infrastructure. The administration has failed to request an authorization from Congress for such spending."
The Ranking Members noted that under the Outer Continental Shelf Lands Act, when the federal government cancels an offshore energy lease, the lessee is "entitled to receive the lesser of two amounts: the fair value of the cancelled rights as of the date of cancellation, or the excess of the lessee's total expenditures on the lease over revenues received."
"Under that formula [in the Outer Continental Shelf Lands Act], TotalEnergies was entitled to whatever the current fair value of OCS-A 0545 and OCS-A 0538 actually was on March 23, 2026, not a full refund of the purchase price," detailed the Ranking Mebers in April. "The administration did not use the statutory formula, as incorporated into the leases. It paid nearly $1 billion—a figure bearing no relationship to what Congress wrote into law, and almost certainly a significant overpayment even under the most favorable reading of the statute."
The same potential violations were noted by Attorney General Rob Bonta Thursday regarding the deal with Invenergy.
"On June 17, 2026, the United States Department of Interior announced that it had reached an agreement with Invenergy to terminate the lease and reimburse the company up to $111,769,231," noted Attorney General Bonta's letter Thursday to the Trump Administration. "This represents the amount that Invenergy paid for the lease, minus $33,530,769 in bid credits that would have supported workforce training, domestic supply chain development, and community benefits in California. The Agreement provides that Invenergy or its affiliates will invest $111,769,231 in other domestic energy projects and covenant not to sue, in exchange for the United States reimbursing Invenergy up to $111,769,231 and cancelling the Lease.
The image below shows information posted by the U.S. Department of the Interior's Bureau of Ocean Energy Management regarding the winning bid submitted in 2022 by Invenergy to obtain the lease for an offshore wind energy project at the Morro Bay Wind Energy Area.
"The Agreement [between the Trump Administration and Invenergy] and the cancellation of Lease OCS P0565 set out in that Agreement violate OCSLA [Outer Continental Shelf Lands Act] and its implementing regulations," Thursday's letter explained. "Among other violations, the federal government (1) did not hold a hearing before deciding to cancel the Lease, in violation of 43 U.S.C. § 1334(a)(2)(A);
(2) did not suspend the Lease for five years before cancellation, in violation of 43 U.S.C. §
1334(a)(2)(B); (3) did not notify or coordinate with the Governors of the affected States, in
violation of 43 U.S.C. §§ 1334(h) and 1337(p)(7); (4) did not consider the required statutory
priorities under 43 U.S.C. § 1337(p)(4) and 30 C.F.R. § 585.102; (5) did not follow the regulations
for lease relinquishment under 30 C.F.R. § 585.435; (6) violated section 8 of the amended Lease
agreement, which states that '[a]ny cancellations are subject to the limitations and protections
contained in subsections 5(a)(2)(B) and (C) of the Act (43 U.S.C. §1334(a)(2)(B) and (C))' and
that '[a]ny cancellation or suspension ordered by the Lessor that is predicated on a threat of serious
irreparable, or immediate harm or damage, or on an imminent threat of serious or irreparable harm or damage, requires a finding by [BOEM] of particularized harm that it determines can only be
feasibly averted by suspension of on-lease activities' Amend. & Restatement of Renewable
Energy Lease OCS-P 0565, § 8 (Jan. 14, 2025); and (7) otherwise failed to comply with OCSLA
and its implementing regulations. The Agreement also provides for compensation in excess of the
statutory formula for cancellations and suspensions, in violation of 43 U.S.C. §§ 1334(a)(2)(C)
and 1341(d)."
Using these deals, the Trump Administration has unilaterally terminated most successful bidders for the Morro Bay Wind Energy Area project.
Golden State Wind previously agreed to abandon its lease within the Morro Bay Wind Energy Area and could recover around $120 million from the Trump Administration, but only after the company makes an investment of, "an equal amount in the development of U.S. oil and gas assets, energy infrastructure, and/or LNG projects along the Gulf Coast" stated the Interior Department.
Golden State Wind is a co-owned joint venture between Madrid-based Ocean Winds and Reventus Power, an offshore wind platform-focused company for the Canada Pension Plan Investment Board.
While Golden State Wind does not indicate any prior oil nor natural gas projects on its website and there is no public indication it pursued the termination of the projects, Invenergy has a robust energy portfolio with more than 225 projects, representing 38 gigawatts of power infrastructure.
During a Bureau of Land Management auction this year, Invenergy secured leases for geothermal energy projects in New Mexico and purchased another 5,000 acres for future geothermal projects in five states, including California, shared the energy company.
The only remaining company that holds a federal lease at the Morro Bay Wind Energy Area, Equinor Wind US LLC., shared with Your News Channel in June of this year, "There are no additional development activities planned at this time."
"These investments and the wind energy production they support would have generated economic benefits, improved grid reliability, lowered energy costs, diversified the State's energy supply, and advanced California's statutory clean energy and climate policy goals," added Attorney General Bonta.
There have been other energy-generating projects selectively terminated by the Trump Administration during an energy emergency it declared last year.
In December of last year, the Trump Administration suspended five large-scale offshore wind projects, including one project that was already generating electricity, "due to national security risks" detailed in still-classified reports the Interior Department shared in a press release.
The Department of the Interior stated in December of last year that previous unclassified reports found that the movement of turbine blades and reflective surfaces at large-scale offshore wind projects create radar interference.
The extent of the interruption, if those risks could be mitigated, and/or were echoed in more recent, still-classified reports by the Department of Defense cited by the Department of the Interior has not been made clear.
"The assertion that the offshore wind projects would impair national security appears to have been
a fabricated justification for canceling the leases," detailed Ranking Members Raksin and Huffman. "If DOI [Department of the Interior] had committed to the essential terms of this deal before it was briefed on the national security assessment it now cites publicly, that assessment is legally pretextual, the cancellation cannot survive legal scrutiny for being arbitrary and capricious, and Congress and the American people were lied to about why their government paid nearly $1 billion to a foreign energy company."
Federal courts have agreed with the Ranking Members and struck down each of those stop work orders despite the use of national security as a reason for terminating the projects.
Simultaneously, the Trump Administration argued that an energy emergency it declared last year requires it to use a Cold War-era defense law to forcibly restart oil production at the Santa Ynez Unit locally due to national security concerns.
The same Administration is also responsible for cutting billions in Congressionally-approved energy investments, potentially outside of its legal authority, rescinding over 3.5 million acres of offshore waters already leased for energy generation, and adding $40 billion in subsidies exclusively for the oil and natural gas industry through the One Big Beautiful Bill.
These unilateral exemptions to federal laws on behalf of private oil and natural gas companies and explicit prohibition of alternative sources of energy all under the umbrella of national security are both not new and ongoing.
"I've got to tell you, it's pretty damn frustrating when I hear and read about this Administration’s approach to offshore wind, particularly off the coast of California," stated California Senator Alex Padilla to Secretary of the Interior Burgum directly during a hearing on Capitol Hill in April of this year. "It makes no sense for an Administration that wants to be energy dominant — as electricity prices are skyrocketing and demand growth is increasing — to pay developers to stop building energy projects that can add more electrons to the grid. Now, off the coast of California, it's not just offshore wind opportunities. You're seeking to now promote offshore drilling off the coast of California and elsewhere."
Your News Channel has reached out to the Department of the Treasury, the Department of Justice, and the Department of the Interior regarding the allegations and their respective responses will be added to this article when they are received.
