Under a deal made public in March, French company TotalEnergies is getting $1 billion — essentially a refund of its leases for offshore wind projects off New York and North Carolina — if it invests the money in fossil fuel projects instead.

State attorneys general from Connecticut, Maine, Massachusetts, New Jersey, Rhode Island and Vermont joined New York in challenging the cancellation of the lease off of New York, the larger of the two projects and the bulk of the payout. They say it will harm their states’ economies, energy grids and climate goals.

“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,” New York Attorney General Letitia James said in a statement. “We are fighting back to stop this illegal agreement that threatens to erase over a thousand union jobs and cheat millions of New Yorkers out of clean, affordable energy.”

New York Gov. Kathy Hochul said she and James will continue to aggressively fight back against President Donald Trump’s “overt and never-ending hostility toward offshore wind.” Trump, who often talks about his hatred of wind power, has said his goal is to not let any “windmills” be built.

The complaint filed in District Court for the District of Columbia names administration officials, including Interior Secretary Doug Burgum, as defendants, and argues that they canceled the lease without following proper procedures. The states are asking a federal judge to vacate the lease cancellation and settlement agreement with TotalEnergies’ subsidiary, Attentive Energy.

The Interior Department did not immediately respond to a request for comment Tuesday, but Burgum defended the deal last month during a hearing at the House Natural Resources Committee.

U.S. Rep. Dave Min, a California Democrat, asked Burgum if it’s appropriate for Interior to send $1 billion to a foreign oil company to stop producing energy, while people are dealing with sky-high utility bills.

Burgum said TotalEnergies was simply refunded their money, which they have already invested in other energy projects in the U.S.

“They essentially gave the U.S. government an interest-free loan and their money was refunded to them,” he said.

Min said the cancellation of TotalEnergies’ offshore wind leases is a case study on Interior’s “economically illiterate and unlawful energy strategy.”

TotalEnergies purchased the lease off New York and New Jersey, in 2022, for $795 million. This was planned as a larger project, with the potential to generate 3 gigawatts of clean energy to power nearly one million homes. It would have brought $10 billion in savings to ratepayers across New York, with $500 million in savings for low-income households, on electricity bills, according to the complaint filed Tuesday.

TotalEnergies also purchased a lease for its Carolina Long Bay project in 2022 for about $133 million. It aimed to generate more than 1 gigawatt there, enough to power about 300,000 homes.

Burgum has said companies were sold a product that was only viable when propped up by massive taxpayer subsidies when they bid for these offshore wind leases in 2022, under former President Joe Biden.

The Trump administration is spending nearly $2 billion to get energy companies to walk away from U.S. offshore wind projects. It adopted this strategy after federal courts thwarted Trump’s efforts to stop offshore wind development through executive action.

Democrats in Congress are investigating the TotalEnergies agreement, and California is investigating a deal that ended a floating offshore wind project, Golden State Wind, proposed off the state’s central coast.

Bluepoint Wind also agreed to end its lease for an offshore wind project in the early stages of development off the coasts of New Jersey and New York. Tuesday’s complaint does not challenge this agreement, as the lease has not been canceled yet.

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