Eight states sue over $1.4bn offshore wind lease buyouts

New York Attorney General Letitia James led attorneys general from New Jersey, Connecticut, Delaware, Maine, Massachusetts, Rhode Island and Vermont in two lawsuits filed on 22 September.

The first challenges the Interior Department's $765 million payment to Bluepoint Wind. The second targets a $653 million payment tied to three Invenergy leases in the Northeast.

The New York-led cases went to the US District Court for the Eastern District of New York and the US District Court for the District of Maine, the Connecticut Mirror reported. California Attorney General Rob Bonta and the California Energy Commission filed their own suit the same day over more than $111 million paid to an Invenergy subsidiary for the Morro Bay lease. Across the three filings, the states ask courts to declare the agreements unlawful, void the lease cancellations and stop further implementation. James's office said Bluepoint "will use the money to build a liquefied natural gas facility" instead of the wind farm New York was counting on.

The leases and the money behind them

Bluepoint paid $765 million for a 71,000-acre lease in the New York Bight and estimated its project could power about 1.5 million homes, NJ.com reported.

Invenergy paid about $645 million for roughly 84,000 acres in the New York Bight and nearly $11 million for a Gulf of Maine lease, and projected its developments could power about 2 million homes.

Those auction prices are the reference point for the buyouts. Interior's $765 million payment to Bluepoint matches what the company paid for its lease. The $653 million covering three Invenergy leases is slightly less than the roughly $645 million the company paid for its New York Bight acreage and nearly $11 million for a Gulf of Maine lease. Engineering News-Record puts the canceled projects at more than 10 GW: 5.8 GW from Invenergy's New York Bight and Gulf of Maine leases, 2 GW from its Morro Bay project and 2.4 GW from Bluepoint's New York Bight project. California's suit covers the Morro Bay Wind Energy Area, where Invenergy was developing a 2 GW floating wind farm. The lawsuits focus on leases awarded through competitive federal auctions. By 22 September the administration had spent more than $4 billion on wind lease buyouts, according to legal filings cited by ENR.

The legal argument over the Judgment Fund

The states say the agreements unlawfully use money from the federal Judgment Fund and violate the Administrative Procedure Act, the National Environmental Policy Act, the Outer Continental Shelf Lands Act and the Judgment Fund Act. California's suit adds the Constitution and the Coastal Zone Management Act.

The Interior Department rejected the premise. A spokesperson said the Department of War identified serious national security risks, that "these were voluntary agreements", and that the Justice Department had reviewed and approved them. The states say federal officials have not specified those security issues.

At the center is a permanent appropriation Congress created to pay court judgments against the federal government. New Jersey Attorney General Jennifer Davenport, a Democrat, said the account is "meant to settle genuine claims arising from actual or imminent litigation against the federal government." California makes a similar point about its own case: the agreement required an equivalent investment by Invenergy's corporate affiliates in fossil fuel or geothermal projects outside California.

Why the states say the cancellations matter

Davenport said the administration is "paying developers to abandon building new sources of energy at a time when our grid needs more power to meet demand and residents need relief from high electricity prices."

California says it has money on the table too. The state invested more than $100 million in offshore wind development, including a statewide strategic plan and port and transmission work, in expectation of projects including Invenergy's, according to its court filing cited by ENR. Voters passed Prop 4 in 2024, earmarking $475 million for related infrastructure. James's office said Bluepoint has committed not to pursue future US offshore wind developments. Interior answered that it "will not sit back and let reckless projects create higher utility costs, a weakened energy system, and unnecessary harm to the environment."

No court has ruled on the 22 September filings. California wants the Morro Bay deal struck down and its implementation blocked; New York wants the lease cancellations voided and further action on the agreements stopped. The September suits follow a June lawsuit by New York and six other states over the administration's March agreement with TotalEnergies, which canceled a New York Bight lease and provided a $795 million reimbursement tied to oil, gas and LNG investment, gCaptain reported. Many of the same states are part of that earlier case.