$2.7B Offshore Wind Cancellations Expose Legal Risk for Data Centers

The U.S. Department of the Interior paid $2.7 billion from the Judgment Fund to cancel nine offshore wind energy leases between March and July 2026. Applying that same mechanism to the PORTS data center complex in Ohio, a 10 gigawatt (GW) facility, is legally viable because its federal contracts lack an equivalent compensation framework, according to a Latitude Media analysis dated July 14.

The Judgment Fund is a U.S. Treasury account used to cover court judgments and administrative settlements. In 2026, it was deployed in four rounds: $928 million to TotalEnergies in March; $885 million to Bluepoint Wind and Golden State Wind in April; $765 million to Invenergy in June for four contracts; and $129 million to Duke Energy in late June. The nine canceled areas represented roughly $100 billion in offshore wind capacity that will not be built.

Seven northeastern states (New York, Connecticut, Maine, Massachusetts, New Jersey, Rhode Island, and Vermont) sued the federal government on June 2, 2026. The action, led by New York Attorney General Letitia James, argues that the payments violate the Judgment Fund Act, the Antideficiency Act, and the Outer Continental Shelf Lands Act (OCSLA), according to AP. The case remains pending before a federal court in Washington.

The risk for PORTS, developed by SB Energy (a SoftBank subsidiary) at the former uranium enrichment site in Portsmouth, Ohio, lies in a legal asymmetry. The 1953 OCSLA establishes a compensation formula for cancellation of continental shelf leases. Department of Energy (DOE) data center contracts, by contrast, derive from the Atomic Energy Act with no equivalent mechanism. Former Interior Department attorney Tony Irish, quoted by Latitude Media, warned that nothing prevents a future administration from using the same instrument against a fossil fuel or data center project.

The PORTS complex envisions 10 GW for artificial intelligence, powered by 9.2 GW of natural gas generation, with $33 billion in generation investment and $4.2 billion in transmission. OpenAI is set to serve as anchor tenant under a 20-year agreement. The first phase, at 800 megawatts (MW), will not come online before 2028.

The ruling on the seven-state lawsuit, pending before a federal court in Washington, will determine whether use of the Judgment Fund to cancel energy leases was lawful. Its outcome will have direct implications for the legal certainty surrounding the 16 federal sites identified for data centers, including Portsmouth.

This article was drafted with artificial intelligence assistance from verified sources and reviewed by a human editor before publication.