Interior Department pays $2.7 billion to cancel nine offshore wind leases

The Interior Department has paid $2.7 billion across four agreements to cancel nine offshore wind leases on the East and West coasts. The first agreement, announced in March, paid French energy company TotalEnergies $928 million to end two leases in the Carolina Long Bay and New York Bight Areas.

TotalEnergies agreed to abandon the projects and invest the funds in natural gas and offshore oil infrastructure. A second agreement in April paid $765 million and $120 million to cancel leases for Bluepoint Wind off New York and New Jersey and Golden State Wind off California.

The developers agreed to redirect the payments to oil and natural gas projects.

Third and fourth agreements In mid-June the department paid $765 million to cancel four leases held by affiliates of Invenergy in the New York Bight, Central Coast of California, and Gulf of Maine. The funds are to be invested in natural gas-fired power plants in Indiana, Wisconsin, Kansas, and Missouri.

The most recent agreement, announced at the end of June, paid Duke Energy $129 million to cancel a lease in the Carolina Long Bay. Duke Energy said it would use the funds for additional generating capacity in the Carolinas.

Legal challenges Seven states led by New York Attorney General Letitia James sued the administration over the TotalEnergies deal, arguing the payments violate the Outer Continental Shelf Lands Act. California said it plans to sue over the Golden State Wind agreement.

The administration has described the payments as dollar-for-dollar reimbursements of lease fees. Turn Forward executive director Hillary Bright said canceling the projects leaves regions without alternative energy resources and does not address ratepayer affordability or grid reliability in the Northeast and mid-Atlantic.