California Attorney General Rob Bonta and the California Energy Commission filed a federal lawsuit Tuesday seeking to block a deal between the Trump administration and energy developer Invenergy that would pay the company more than $111 million to abandon an offshore wind lease off California's central coast.

Invenergy acquired the lease in a 2022 federal auction for the Morro Bay Wind Energy Area. The proposed project could have generated up to 2 gigawatts of electricity. Under the June agreement with the Department of the Interior, Invenergy would receive a partial reimbursement for the lease while committing to redirect an equivalent investment toward natural gas and geothermal projects.

The Trump administration has defended the broader lease buybacks as part of an effort to address energy security and shift investment toward power sources it considers more reliable. Federal officials have also cited national security concerns surrounding the California offshore wind leases.

California is challenging the legality of the arrangement under several federal laws, including the Outer Continental Shelf Lands Act and the Administrative Procedure Act. The state also argues the administration improperly used the federal Judgment Fund because the agreement purportedly settles litigation that Invenergy had not actually filed.

The lawsuit is part of California's broader legal fight against the administration's cancellation of offshore wind projects. In August, Bonta and the Energy Commission sued over a separate $120 million buyout involving Golden State Wind, another company developing an offshore project near Morro Bay. California has also begun the process of challenging a separate $1.22 billion agreement involving RWE.

California has committed more than $100 million toward ports, transmission infrastructure and other preparations for an offshore wind industry and has set a goal of developing 25 gigawatts of offshore wind capacity by 2045. The state argues that federal lease cancellations could undermine those investments and its long-term energy plans.

The Trump administration and California are therefore presenting fundamentally different views of the buyouts. Washington says the agreements redirect resources toward energy projects intended to strengthen reliability and energy security, while California argues the federal government is improperly using taxpayer money to dismantle projects the state has spent years preparing to support.

The courts will now determine whether the Invenergy agreement can stand.