Interior terminated Golden State Wind's $120M Morro Bay offshore lease via settlement of never-filed litigation

On April 27, 2026, the U.S. Department of the Interior announced it would terminate Golden State Wind LLC's $120 million commercial lease in the Morro Bay Wind Energy Area off the California coast through an agreement styled as a settlement of litigation that Golden State Wind had never filed. Under the arrangement, Interior redirected $120 million in federal funds to pay the company to abandon its lease and required the developer to invest an equal sum in out-of-state fossil-fuel projects, citing unspecified national security concerns despite the department's prior approval of the lease area following Defense Department consultation.

California officials say the deal circumvents the Outer Continental Shelf Lands Act, which governs how federal offshore leases may be issued and cancelled, and that the settlement structure with no underlying case is the mechanism used to bypass those statutory constraints. The lease sat in a wind energy area federal regulators had approved after environmental and national-security review.

Updates

2026-05-04 — California Energy Commission subpoenaed Golden State Wind over the lease buyout [3]

The CEC issued an administrative investigative subpoena to Golden State Wind seeking records on the DOI settlement, citing potential unlawful-relinquishment violations and more than $100 million in state investments made in reliance on the company's offshore wind commitments.

2026-06-23 — California moved to sue Interior over the lease termination [1]

California's attorney general and Energy Commission sent Interior and Golden State Wind a 60-day notice of intent to sue under the Outer Continental Shelf Lands Act, alleging the settlement of never-filed litigation unlawfully cancelled the lease.

2026-08-28 — California filed suit against Interior and Golden State Wind [4, 5]

California Attorney General Rob Bonta and the California Energy Commission filed suit against the U.S. Department of the Interior and Golden State Wind in federal court, following the state's June 23 notice of intent to sue. The complaint argues the settlement terminating the lease violates the Outer Continental Shelf Lands Act's procedures for cancelling a federal offshore lease, along with the Judgment Fund Act, and asks the court to strike down the agreement. A Department of the Interior spokesperson said the agency had no comment due to the pending litigation.