Bluewater had been in discussions with Sussex council over plans to build an underground transmission line through Bethany Beach.
According to DelamarvaNow, Bluewater altered and failed to sign a memorandum of understanding sent by the council in April. Later, Bluewater said it wanted to look at an alternative route.
The next steps would have been to conduct an environmental-impact study. However, the council decided to break off discussions over the changes and failure to sign.
Vice mayor Jack Gordon said: "Based on this letter and previous actions, I do not believe that NRG Bluewater has been dealing with the town in good faith. The townspeople cannot tolerate having this issue hanging over their heads for any longer."
In March, The US government announced it had started processing Bluewater’s application to build the wind farm.
The move was announced by secretary of the interior Ken Salazar and BOEMRE director Michael Bromwich and is the first project to be subject to a streamlined offshore regulatory process.
The Delaware project will be first commercial lease to be processed under the ‘Smart from the Start’ programme, which to speed up offshore development on the Atlantic coast.