The operator of New York’s electric grid expects that President Donald Trump’s tariff on Canadian imports could increase power costs to New Yorkers.
The New York Independent System Operator has asked federal regulators for fast-tracked approval to collect the tariffs from Canadian generators, on the assumption that electricity is covered by the new tariff.
New York is the biggest importer of Canadian electricity, which in recent years has provided anywhere from 4% to 11% of power used in the state. New York imported 7,700 gigawatt-hours from Canada in 2024, worth hundreds of millions of dollars, according to the NYISO federal filings.
Adding to the hurt for New Yorkers, the leader of the province of Ontario has said he will add a 25% export tax on electricity sent to New York and other states in retaliation for Trump’s tariffs.
The tariff on Canadian energy is part of Trump’s broader 25% tariff on goods made in Mexico and Canada. The directive calls for a 10% duty on “energy and energy resources.”
Even though the tariffs took effect today, energy officials in New York and New England say they don’t know whether they are supposed to collect the tariff on electricity imported from Canada.
New York imports power worth hundreds of millions of dollars a year from Canada.
Without a means to collect the tariffs, the NYISO could face “adverse consequences, including possible bankruptcy’’ if it is found responsible for collecting the payments, the organization told regulators.
The New England grid operator also asked for direction on how to proceed. Grid operators in both regions have asked the Federal Energy Regulatory Commission to tell them whether the tariff applies to electricity and, if so, how it is to be collected.
Out of caution, the New York grid operator asked for permission to approve a requirement that any entity that causes Canadian electricity to be imported to New York bear the cost of the tariffs. No such mechanism exists yet.
ISO New England estimated that a 10% tariff on electricity imports could cost about $66 million on its grid, according to its FERC filing. It’s not clear how much the tariff would add to New York consumer electric rates.
“Duties on Canadian electricity would likely amount to tens of millions of dollars per year,‘’ the NYISO said.
Ontario’s leader said he will add a 25% export tax on electricity sent to New York and other states in retaliation for Trump’s tariffs. Ontario provides 2,500 of the 4,600 megawatts of capacity that New York draws upon from Canada, the NYISO reports.
Doug Ford, the Ontario premier, also said he was prepared to shut off the exports altogether if American tariffs persist.
NYISO officials said they do not expect power shortages stemming from the tariffs but offered little clarity about where the issue is headed.
“The U.S. and Canada have one of the most integrated electric grids in the world, allowing system operators in both countries to pool resources for improved reliability and economic efficiency,’’ said Kevin Lanahan, a NYISO vice president, in a statement. “We are in close and regular contact with Hydro Quebec and Ontario’s Independent Electricity System Operator. The NYISO anticipates having adequate supplies to meet expected demand on the system.”