The California Energy Commission is investigating the deal that Golden State Wind made with the U.S. Department of the Interior to surrender a wind lease off the coast of California in exchange for a payment from the federal government, and it anticipates litigation, according to letters and a subpoena the commission released Monday.

The CEC’s subpoena requests records from Golden State Wind, including the full terms of the agreement between the project and the Interior Department, communications about the agreement between those two parties, and internal communications from Golden State Wind “concerning litigation or administrative proceedings over the [lease], whether brought by any party, and whether anticipated, hypothetical, threatened or actual,” from Jan. 20 onward.

Golden State Wind is co-owned by the Canada Pension Funds Investment Board and Ocean Winds, the latter a joint venture owned by Engie and EDP Renewables. The project was expected to generate up to 2 GW once fully operational. Golden State Wind purchased the lease in 2022; on April 27, the Interior Department announced Golden State Wind had agreed to “voluntarily” end its lease agreement with the government and recover around $120 million in lease fees.

The Interior Department has made similar agreements with the owners of the leases for Bluepoint Wind, Attentive Energy and Carolina Long Bay. Experts, including former Interior Department officials, have questioned the legality of these agreements, saying there is not a legal mechanism for the federal government to buy developers out of their leases.

The CEC and California’s Department of Justice are “investigating potential violations of law in connection with the Lease Buyouts and anticipate potential litigation involving the federal government and parties to Lease Buyouts impacting California’s energy needs and offshore wind programs,” said a letter from the California attorney general’s office to Golden State Wind. 

In its letter to the project, the CEC wrote that Golden State Wind’s “taxpayer-funded lease buyout deal announced last week undermines significant investments made by the State of California and other public entities in California to develop the transmission and port infrastructure necessary for offshore wind projects.”

These investments “were made in reliance on commitments by Golden State Wind and other companies who hold leases to develop offshore wind projects off the coast of California, as well as by the federal government,” it added.

The CEC’s letter also noted that Golden State Wind’s lease “includes bid credit commitments of more than $24 million for workforce training and supply chain, and $6 million in Lease Use Area Community Benefits Agreements, plus any applicable interest and penalties.”