Seven US States Sue Trump Administration Over Cancellation of Offshore Wind Projects

Seven northeastern US states filed a lawsuit on Tuesday against the federal government, challenging a deal between the US Department of the Interior and French energy giant TotalEnergies. Under the agreement, TotalEnergies received $928 million to cancel two offshore wind projects off the coasts of New York and North Carolina and committed to investing in oil and gas.

The lawsuit, filed by attorneys general from New York, New Jersey, California, Maryland, Massachusetts, Rhode Island, and Virginia, states that New York is “severely lacking in additional power supply.” The Attentive Energy wind project—located 54 miles south of New York’s Jones Beach—was expected to provide electricity to one million homes and businesses in New York and New Jersey, helping these states “ensure grid reliability and meet statutory climate goals.”

This was not an isolated deal. In March and April, the Interior Department reached similar agreements to terminate lease contracts for four offshore wind projects, including Attentive Energy, Carolina Long Bay, Golden State Wind (off central California), and Blue Point Wind (off New York). The total federal payout to developers for exiting these four leases exceeds $2 billion.

Legal experts say the deals are unprecedented. Dave Owens, a law professor at the University of California, San Francisco, called them “remarkable” understatement: “I know of no precedent for this.” Jordan Diamond, president of the Environmental Law Institute, noted: “This is the first time developers have been paid to walk away from wind energy leases.”

The California Energy Commission issued a subpoena to Golden State Wind, demanding all documents and emails related to the agreement. Estimates suggest the project’s cancellation cost California more than $100 million due to investments in ports, berths, and other infrastructure prepared for the project. Legal experts predict California may sue either Golden State Wind or the federal government.

TotalEnergies stated in March that the project “does not serve the national interest” and that “TotalEnergies’ studies have shown that offshore wind in the US, unlike in Europe, has high costs and could negatively impact electricity prices for American customers.” However, CEO Patrick Pouyanne admitted to Axios that offshore wind projects “require years of development… If every four years you change the administration and policy, you invest and then stop, it doesn’t work. I can’t do that.”

In contrast, the New York State Common Retirement Fund, an investor in TotalEnergies, said it is considering divesting from the company.

Previously, in December last year, the Interior Department canceled five offshore wind projects under construction in the northeastern US. Developers sued and courts allowed construction to continue. The Oceantic Network, an offshore wind industry association, said operational projects in Massachusetts, New York, Rhode Island, and Virginia currently generate 1 gigawatt of electricity—enough for 500,000 homes.

The Interior Department cited national security concerns from the Pentagon as the reason for canceling leases. However, the seven-state lawsuit asserts that these projects had already passed security reviews before being granted permits. The lawsuit also questions the use of the Judgment Fund to pay compensation, arguing that “there is no legal dispute over liability or amount” since the projects were still progressing.

Industry analysts say other wind developers have received similar offers to exit their leases. If more contracts are canceled, states stand to lose substantial investments in ports, infrastructure, and skilled labor training. The nonprofit Natural Resources Defense Council observed: “The persevering companies may reap long-term benefits. This phase will pass.”