A multistate lawsuit is putting a national spotlight on the Trump administration's plan to send nearly $928 million to TotalEnergies to cancel two offshore wind leases off New York.
New York Attorney General Letitia James is calling the agreement a "sham deal," arguing that it trades clean energy, union jobs, and grid support for more oil and gas investment.
James, joined by attorneys general from New Jersey, Connecticut, Maine, Massachusetts, Rhode Island, and Vermont, sued the administration in federal court this week over the payout, HeatMap reported.
The states argue that the federal government broke the law by agreeing to refund TotalEnergies for the leases and by planning to use the Treasury's Judgment Fund, money typically reserved for legal settlements, to make the payment.
In exchange for walking away from the offshore wind projects, TotalEnergies would invest a matching amount in U.S. oil and gas projects, according to the Interior Department's announcement.
"After repeatedly losing in court, this administration cooked up a sham deal to pay a foreign energy company hundreds of millions of taxpayer dollars to abandon offshore wind and invest in oil and gas instead," James said.
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She added that the agreement threatens to "erase over a thousand union jobs" and "cheat millions of New Yorkers out of clean, affordable energy."
The lawsuit also says federal officials skipped required procedures before moving to cancel the leases, including hearings and coordination with affected governors.
The states say the canceled projects would have helped meet rising electricity demand, replace aging power plants, and advance climate goals while creating jobs and broader economic activity.
In New Jersey, one of the affected projects, Attentive Energy Two, was expected to generate 1.3 gigawatts, enough to power roughly 650,000 homes. The suit says the project also could have brought an estimated $3.1 billion in economic benefits to the state.
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In New York, where grid officials have warned of reliability risks as older plants retire, the loss of offshore wind capacity could make it harder to keep electricity affordable and dependable.
The Interior Department pushed back on the lawsuit, saying the "only thing blatantly unlawful here was the process by which these offshore wind leases were negotiated and imposed under the Biden administration."
Clean energy advocates welcomed the lawsuit.
Liz Burdock, president and CEO of the Oceantic Network, said the governors were right to challenge actions that threaten "jobs, investment, and the nation's ability to meet growing electricity demand with an affordable and reliable energy source."
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