Swelling U.S. power prices may rise even faster in some parts of the country if 10% energy tariffs imposed by the Trump administration this week hit Canadian electricity supplies and trigger retaliation, according to energy experts and grid operators.
The U.S. imports about 1% of its total power needs, according to government data, but New York state and regions like New England rely much more heavily on electricity generated in Canada, meaning they could soon be delivering higher bills to utility customers.
Ontario Premier Doug Ford, meanwhile, told media outlets this week that he was prepared to halt the transmission of electricity from his province to the U.S. - something that could crimp supply and drives prices even higher.
"There are gross price implications and reliability implications," said Timothy Fox, an analyst at ClearView Energy Partners.
The tariff fight between the U.S. and Canada, which are each others' biggest electricity trading partners, threatens to throw off a supply-and-demand balancing act that prevents blackouts and keeps power prices in check, according to grid operator filings and energy experts.
The U.S. is a net importer of Canadian power, buying 2,700 gigawatt hours last year, or about 50% more than it sold to Canada, according to EIA data.
In the U.S. Northeast, where the reliance on Canadian electricity is higher than most of the country, the consequences of pricier or curtailed electricity could be steeper, Fox said.
"The NYISO (New York Independent System Operator) and neighboring system operators have serious concerns that applying export tariffs to electricity may have serious adverse effects on reliability and wholesale electric markets," New York's grid operator said in its filing with the Federal Energy Regulatory Commission.
Still, grid operators in New York state and New England on Friday asked federal regulators for the ability to establish rules that would allow them to impose duties on Canadian electricity imports if ordered to do so by the U.S. government.
ISO New England, which covers six states from Maine to Connecticut, told FERC that 10% tariffs on power would add $66 million in annual customer costs.
The New England grid operator imported about 11% of its power from Canada over the last five years, according to data from its website.
Household electricity costs in New England, which already has power supply constraints and strong demand, are about 29% higher than the national average.
Multiple grid operators, which oversee wholesale power markets, told Reuters it was unclear whether the tariffs will apply to electricity because there is no known precedent for them and the White House did not explicitly say power would be targeted.
"This is a complex situation with many moving parts," said Randy Burlingame, a spokesperson for ISO New England.
The White House did not immediately respond to a request for comment.
The California Independent System Operator (CAISO), which runs California's grid, and the Midcontinent Independent System Operator (MISO), which is in charge of the grid for the Midwest, said they are assessing the possibility of tariffs, but were unclear if - or how - they would apply to power markets.
"This is a fluid situation, and it is unclear whether the U.S. import tariffs apply to imports of electricity from Canada, and it is uncertain whether or when this will be resolved," MISO spokesperson Brandon Morris said.
(Reuters, March 5, 2025)
