New York and seven other US states have filed two lawsuits challenging federal agreements that would cancel four offshore wind leases in exchange for a combined $1.4 billion in taxpayer-funded payments.

New York Attorney General Letitia James is leading the legal action, joined by the attorneys general of Connecticut, Delaware, Maine, Massachusetts, New Jersey, Rhode Island and Vermont. The lawsuits target separate agreements between the US Department of the Interior (DOI) and offshore wind developers Bluepoint Wind and Invenergy.

The two cases were filed during Climate Week and seek to block the agreements and prevent the cancellation of the affected offshore wind leases.

“The Trump administration's unlawful pay-to-not-play scheme to pressure companies to forego planned offshore wind projects in America is an outrageous abuse of taxpayer dollars that hurts our ability to meet our energy needs, reduce emissions, create good paying jobs, and help secure American energy independence,” said New York Governor Kathy Hochul.

“Working with Attorney General James and the seven other AGs who filed this lawsuit, we will continue to fight back against the unending war against clean energy being waged by this President and his Republican allies to ensure a healthier and cleaner future that allows us to keep the lights on and costs down here in New York,” she added.

“Americans are facing increasing energy costs because this administration would rather pay off energy companies than let us build the new power sources we need,” said Attorney General James.

“These illegal backroom deals take money that should have gone toward lowering New Yorkers' bills and hand it to fossil fuel projects in other states, all while our energy demand continues to grow. At a moment when every available resource should go to keeping the lights on and prices down, this administration is choosing corruption over communities. We will fight until these unlawful deals are struck down,” she added.

Two offshore wind lease agreements

The first lawsuit challenges the DOI's agreement with Bluepoint Wind, under which the company’s offshore wind lease off New York would be canceled. According to the New York Attorney General’s Office, Bluepoint would receive $765 million from the federal Judgment Fund.

The state says the project had been expected to contribute to New York’s electricity supply and that, following the agreement, Bluepoint plans to use the funds to develop a liquefied natural gas facility and has committed not to pursue future offshore wind developments in the United States.

The second lawsuit concerns an agreement between the DOI and Invenergy, which would cancel three offshore wind leases, including one off New York. The company would receive $653 million from the Judgment Fund.

According to the states, Invenergy would redirect the funds toward natural gas projects in Indiana, Wisconsin, Iowa, Kansas and Missouri, as well as geothermal projects in the western US.

The two canceled New York projects were expected to represent more than $16 billion in investment in the state and create more than 2,800 jobs, according to the New York Attorney General’s Office. The projects were also expected to connect directly to New York City’s electricity grid.

Together with the other two Invenergy leases, the canceled projects were expected to provide more than 8 GW of electricity, enough to supply more than four million homes, according to the state.

Legal challenge over federal funding

The lawsuits come as New York forecasts electricity demand to increase by 8% by 2030 and 24% by 2040, driven in part by economic development and new large electricity loads, including data centers.

The states argue that the federal agreements do not resolve an actual or imminent legal dispute and therefore should not be financed through the Judgment Fund, which Congress established to pay legitimate claims against the federal government.

The coalition argues that the agreements violate the Administrative Procedure Act, the National Environmental Policy Act, the Outer Continental Shelf Lands Act and the Judgment Fund Act, among other federal laws.

The states are asking the courts to declare the agreements unlawful, invalidate the lease cancellations and prevent the federal government from taking further action to implement them.

The legal action follows several previous court challenges by states and other parties against federal measures affecting offshore wind development. According to the New York Attorney General’s Office, the administration has subsequently shifted toward agreements with developers to terminate offshore wind projects.

California is pursuing a separate lawsuit over an agreement between the federal government and Invenergy to cancel an offshore wind lease off the California coast.