California probes Trump deal to end California offshore wind project

California regulators escalated a fight over federal energy policy by subpoenaing Golden State Wind LLC after the Trump administration struck a deal to pay the company to walk away from a 2-gigawatt floating offshore wind project off the state’s central coast. The California Energy Commission said the administrative investigative subpoena, issued May 4, seeks documents and information about Golden State Wind’s agreement with the U.S. Department of the Interior to accept a payout in exchange for abandoning its lease in the Morro Bay Wind Energy Area.

The legal mechanism at the center of the dispute is simple and highly unusual. Under the Interior Department’s arrangement, Golden State Wind and Bluepoint Wind agreed to voluntarily end their offshore wind leases in exchange for reimbursements totaling nearly $900 million, with the department describing the payments as dollar-for-dollar reimbursement of offshore wind lease fees. California officials want to know how federal money is being used to persuade companies to abandon projects that had already won leases, and whether the arrangement collides with state policy or law. California Energy Commission chair David Hochschild said Californians deserve answers and argued that taxpayers should be used to build a sustainable energy future, not to pay companies to make projects disappear.

Golden State Wind is no small project. Its developers say the floating turbine array could generate up to 2 gigawatts, enough to power about 1.1 million homes, from waters off the Morro Bay Wind Energy Area. The federal government had only recently opened that corner of the Pacific to development, holding the first West Coast offshore wind lease auction in December 2022 and awarding three leases after years of planning through the Bureau of Ocean Energy Management. The California inquiry now reaches back into that federal process and asks whether Washington is reversing course by paying developers to exit.

The administration has moved quickly. Interior announced the Golden State Wind and Bluepoint Wind agreements on April 28, following a March 23 settlement with TotalEnergies that gave up the company’s Carolina Long Bay and New York Bight leases. Interior Secretary Doug Burgum defended the rollback by saying some offshore wind projects had only been viable because of large subsidies under the Biden administration. California Rep. Salud Carbajal blasted the Morro Bay deal as “backwards” and said he was outraged. Offshore wind has been contentious in Morro Bay for years, including protests in January 2025 that drew more than 200 people.

The result is more than a local fight over one lease. With three deals now announced and nearly $2 billion in federal payouts aimed at ending offshore wind ventures, California’s subpoena could become a test case for how far an administration can go in using executive power and public money to unwind an energy industry it once promoted. The immediate question is who gets paid; the larger one is how much the timetable for U.S. offshore wind can be delayed by federal intervention and state resistance.