- Ontario’s Premier, Doug Ford, threatens a 25% surcharge on electricity exports to Michigan, New York, and Minnesota.
- Potential disruptions could impact energy costs and grid reliability in several U.S. states.
Canada plays a vital role in the U.S. energy market by exporting large amounts of electricity yearly. This cross-border trade ensures economic efficiency and grid stability for both nations.
Recently, political disputes have raised concerns about energy disruptions. After President Donald Trump imposed a 25% tariff on Canadian imports, Ontario Premier Doug Ford responded with a countermeasure. As reported by USA Today, Ford threatened to introduce a 25% surcharge on electricity exports to key U.S. states. Ford even suggested a complete halt in electricity exports if necessary.
The proposed surcharge could significantly affect states dependent on Canadian electricity. New York relies heavily on imports from Hydro-Québec and Ontario’s Independent Electricity System Operator (IESO). The New York Independent System Operator (NYISO) warned that disruptions could threaten public safety and grid stability.
Higher electricity prices in New York are a likely consequence, although NYISO officials remain confident that the state has enough resources to meet demand. Meanwhile, Michigan imports some power from Ontario but is less reliant than commonly assumed. Most of Ontario’s electricity flows through Michigan to other states in the Eastern Interconnection grid.
Michigan’s major utilities, such as DTE Energy and Consumers Energy, generate most of their power domestically. However, grid reliability concerns remain, especially regarding the Lake Erie flow loop, a key energy corridor.
Due to its diverse energy mix, Minnesota is expected to face fewer disruptions. However, a 2024 North American Electric Reliability Corporation (NERC) report classified the region as high risk for power shortages during peak seasons. Darrick Moe, president of the Minnesota Rural Electric Association, emphasised the need for more energy sources to maintain reliability.
While the U.S. generates most of its power domestically, natural gas accounts for nearly 40% of total electricity production. Canadian imports make up about 1% of the U.S. electricity supply, but regions like New York and New England depend more heavily on them. Any surcharge on Canadian power could drive up utility bills, adding financial strain to consumers.
As tensions rise, energy officials and policymakers must weigh the potential economic and security risks of trade disputes affecting electricity supplies.