California Files Notice of Intent to Sue Over $111 Million Morro Bay Lease Buyout

Overview

• California Attorney General Rob Bonta and California Energy Commission Chair David Hochschild sent the notice on Thursday, July 16, 2026, targeting a June 17 DOI agreement that would cancel Invenergy’s Morro Bay lease (OCS-P 0565).
• The state says the deal would use more than $111 million in federal funds to pay Invenergy to abandon the lease and would require an equivalent company investment in fossil fuel or geothermal projects.
• California alleges the Interior Department violated the Outer Continental Shelf Lands Act by cutting the state out of the lease process and has given DOI and Invenergy 60 days to cure the alleged legal breaches before filing suit.
• The action follows a separate DOI $120 million buyout of Golden State Wind’s nearby lease and comes while the CEC has issued subpoenas to Golden State Wind and Invenergy and multiple states have filed parallel notices challenging other buyouts.
• The dispute threatens California’s long-term offshore wind plans after the state spent more than $100 million preparing ports and transmission and after Invenergy paid over $111 million in 2022 and pledged more than $30 million for local workforce and supply-chain benefits.