Seven States Sue Trump Administration Over $795 Million Payment to TotalEnergies to Cancel New York Offshore Wind Lease

New York Attorney General Letitia James and Governor Kathy Hochul have announced a lawsuit joined by six additional state attorneys general challenging the Trump administration's agreement to pay TotalEnergies approximately $795 million from the federal Judgment Fund to cancel two offshore wind leases, including the Attentive Energy lease approximately 47 miles off the New York coast that was expected to deliver clean energy directly to New York City and power more than 700,000 homes. The deal, reached in March 2026 after a series of administration court losses in its efforts to eliminate wind energy development, also required TotalEnergies to pledge not to develop any new offshore wind projects in the United States and to invest approximately $795 million in fossil fuel projects. Attorneys general from Connecticut, Maine, Massachusetts, New Jersey, Rhode Island and Vermont joined New York in the lawsuit, which asks the court to strike down the agreement, vacate the lease cancellation and halt further implementation of the deal.

 

The Cancelled Projects and Their Economic Significance

 

The Attentive Energy lease was purchased in 2022 for $795 million as part of the highest-grossing competitive offshore energy lease sale in US history, with the lease area supporting two planned projects. Attentive Energy One was expected to deliver power directly to New York City while Attentive Energy Two would have served New Jersey, with the combined development representing a critical component of New York's strategy to meet growing electricity demand in the state's largest metropolitan area. The Attentive Energy One project alone was estimated to deliver $25.6 billion in economic benefits to New York over its 25-year life, including $10 billion in savings on energy bills, alongside an estimated 1,716 new jobs in the state.

New York's State Energy Plan projects that electricity demand will continue rising significantly in coming years, with offshore wind expected to play a major role in ensuring the state has sufficient generation capacity, particularly given the concentration of demand in New York City and the limited availability of new generation sites close to the metropolitan area. The cancellation of Attentive Energy One directly threatens the feasibility of New York's clean energy supply planning at a moment when AI infrastructure expansion and electrification are intensifying demand pressure. NYSERDA President and CEO Doreen Harris said offshore wind is a vital part of New York's diverse energy portfolio and that the state remains committed to delivering reliable, affordable energy.

 

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The Legal Arguments Against the Administration's Deal

 

The coalition's lawsuit asserts two principal legal violations. The first concerns the Outer Continental Shelf Lands Act, which limits the Department of Interior's ability to cancel offshore wind leases by requiring a hearing, a specific finding that continuing the lease would likely cause serious harm to life, property, national security or the environment, and a determination that the benefits of cancellation outweigh the benefits of continuation. The coalition argues that DOI did none of these things before cancelling the Attentive Energy lease, rendering the cancellation procedurally unlawful regardless of the underlying policy motivation.

The second violation concerns the Judgment Fund Act, which permits the Treasury's Judgment Fund to be used only to settle claims related to ongoing or imminent litigation. The coalition argues that the $795 million payment to TotalEnergies was not a legitimate compromise settlement in an imminent lawsuit but rather a contrived arrangement designed to satisfy the administration's policy opposition to offshore wind development, making the payment an unlawful use of federal funds. Governor Hochul described the arrangement as a pay-not-to-play scheme and an outrageous abuse of taxpayer dollars that hurts the ability to meet energy needs, create good jobs and help secure American energy independence while reducing emissions.

 

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The Administration's Pattern of Anti-Wind Actions

 

The administration's deal with TotalEnergies follows a series of executive actions and legal attempts to eliminate wind energy development that have been repeatedly blocked by federal courts. On his first day in office, the president halted federal approvals for all wind energy projects nationwide, a blockade that Attorney General James challenged and which a federal court ended with a final judgment in December 2025. The administration subsequently attempted to suspend construction on several offshore wind projects including Empire Wind and Sunrise Wind in New York on national security grounds, which federal courts again blocked following further litigation led by James. The TotalEnergies agreement represents a new approach to achieving the same policy objective through a negotiated private agreement rather than direct executive action.

Attorney General James said the 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, and described it as an illegal agreement that threatens to erase more than a thousand union jobs and cheat millions of New Yorkers out of clean, affordable energy. The characterisation of the TotalEnergies pledge not to develop further US offshore wind as part of the deal adds an additional dimension to the dispute, as it suggests the administration used federal funds to extract a commercial commitment from a private company regarding its US market participation, going beyond simple lease cancellation.

 

Outlook for US Offshore Wind Policy and Litigation

 

The multi-state lawsuit represents the most legally significant challenge yet to the administration's offshore wind policies, combining procedural arguments under two separate federal statutes with a coalition of seven states that collectively represent a substantial share of planned US offshore wind development. Whether the courts will intervene to void the TotalEnergies agreement and reinstate the lease will depend on the strength of the OCSLA procedural arguments and the Judgment Fund Act claims, each of which presents distinct legal questions about the scope of executive authority in energy lease management and federal appropriations law. The speed of judicial review will be critical given TotalEnergies' stated commitments to redirect investment toward fossil fuels and away from US offshore wind development.

The broader implications for US offshore wind extend well beyond New York and New Jersey. If the administration's approach of negotiating private agreements to effectively purchase exit from the offshore wind market is validated by the courts, it could provide a template for similar arrangements with other developers, fundamentally reshaping the commercial landscape for US offshore wind. The legal outcome will be closely watched by developers, investors and state energy planners across the Atlantic seaboard who have committed capital and planning resources to offshore wind projects that are now operating in a highly uncertain regulatory environment.

 

 

Source: New York Attorney General Press Release