June 17 (Reuters) – The Trump administration on Wednesday said it would pay $765 million to power project developer Invenergy to terminate four wind leases off the coasts of New York, California and Maine.
The Department of the Interior said in a statement that Invenergy will use those funds to develop natural gas power plants in five Midwestern states and geothermal projects in the Western United States.
The deal is the latest of several the administration has announced this year as part of a wide-ranging effort to stop development of U.S. offshore wind projects, which it regards as costly and inefficient.
President Donald Trump’s administration has sought to increase domestic fossil fuel production and scrapped policies that support clean energy development, which has been criticized by Democrats and industry advocates.
“We applaud Invenergy for recognizing the importance of baseload power and investing in energy solutions that deliver real benefits to American consumers,” Interior Secretary Doug Burgum said in a statement.
Seven U.S. states sued the administration earlier this month over a nearly $800 million payment to France’s TotalEnergies to cancel an offshore wind lease off the coast of New York. The states alleged the administration failed to follow proper administrative processes and misused a government fund reserved for legal settlements even though there was no litigation between the parties.
An Interior Department spokesperson said the agreement had been reviewed by the Department of Justice and went through all appropriate channels. Invenergy did not comment on the legality of the settlement.
Stanley Woodward, associate attorney general with the Department of Justice, said in the statement that the agency looked forward “to continued cooperation from companies that are reevaluating their energy investments.”
Invenergy will invest a portion of the $765 million in natural gas plants in Indiana, Wisconsin, Iowa, Kansas and Missouri, according to the announcement.
The company’s offshore wind leases included two in the Gulf of Maine and one each off the coasts of New York and California. All four were in early stages of development, according to a source familiar with the company, who said it had not ruled out getting back into the industry at a future date.
In Interior’s statement, Invenergy’s senior vice president for development, Daniel Runyan, said the Chicago-based company would “deploy additional capital into projects that can be delivered on a commercially reasonable timeline and meet customer demand while continuing to evaluate opportunities as market conditions evolve.”
An offshore wind industry group, Turn Forward, said the agreement would cancel much-needed electricity capacity at a time of soaring demand.
“Replacing coastal offshore wind with geothermal or natural gas infrastructure in another region does nothing to address rising ratepayer affordability concerns, reliability challenges or potential gaps in power supply in the Northeast and Mid-Atlantic,” Hillary Bright, executive director of Turn Forward, said in a statement.
(Reporting by Ryan Jones, Writing by Christian Martinez; Editing by Aurora Ellis and Bill Berkrot)
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