In early February, President Donald Trump announced plans to levy new tariffs on imports from Canada, including a 10% surcharge on “energy resources” — though his administration did not immediately follow up on what, exactly, that meant. The result has been confusion as to whether or not t hat would apply to electricity flowing across the U.S.-Canadian border on transmission lines, supplying a vital source of power, particularly in New England. Adding to the complexity of the situation, many of the president’s tariffs were later paused, allowing officials on both sides of the border more time to negotiate. In the meantime, Trump has continued to threaten even larger tariffs on Canada should the country attempt to retaliate by doing “economic harm” on the U.S. As of this week, Connecticut’s regional grid operator, ISO New England, has not received any charges from import tariffs, according to a spokeswoman. The threat of energy tariffs, however, complicates efforts by leaders in Connecticut to address the state’s frustratingly-high costs of electricity, which are driven in part by a limited supply from local power plants. During a forum hosted by CT Mirror earlier this week, Gov. Ned Lamont said that a 20% tariff — larger than what Trump has proposed — on Canadian electricity would cost utility customers in Connecticut about $100 million. “We’re going backward there,” Lamont said, going on to criticize the Trump administration’s approach toward America’s northern neighbor. “I can’t figure out why he loves our enemies and hates our friends.” Does Connecticut import electricity from Canada? Yes. Connecticut is a part of a regional transmission organization known as ISO New England, which operates sort of like a stock market on which local utilities and generators compete to buy and sell power. Some of the major sellers on that market are generators based in Canada, whose electricity flows into the regional grid where it is then distributed across all six New England states. In 2024, New England imported 13,897 gigawatt hours of electricity, more than half of which came directly from Canada. Much of that power comes from Hydro-Quebec, a public utility that operates a vast network of hydroelectric dams that make it one of the world’s largest producers of carbon-free electricity. How much electricity the region gets from Canada at any particular moment can depend on demand, the supply of electricity generated by local power plants and a variety of other factors. For example, a prolonged drought last summer limited how much power Quebec’s dams could produce, causing exports to New England to plummet. (For part of the year, the U.S. was actually a net exporter of electricity to Canada, a rare feat). Due to its plentiful supply of clean electricity, leaders throughout New England have sought to expand transmission ties to Hydro-Quebec, allowing them to import more power to meet their state’s decarbonization goals. The New England Clean Energy Connect project, for example, is a proposed transmission line to Lewiston, Maine that will provide an additional 1,200 megawatts of hydroelectric power — enough to power roughly 1.2 million homes — to customers in New England. While the cost of the project is being paid by ratepayers in Massachusetts, once the electricity is dumped into the grid it can flow to customers across New England. In addition, due to the region’s lack of plentiful, alternative power sources such as nuclear and natural gas — coupled with ever increasing demand from customers — the rising cost of Canadian electricity would likely ripple throughout the market, explained Erik Katovich, a professor of environmental and resource economics at the University of Connecticut. “There’s limited other options to replace that, and the other options that do exist are not cheaper,” Katovich said. “They’re more expensive, right? So because of that, New England doesn’t have much bargaining power. They kind of have to buy that from Canada, even if the price goes up by 10 or 25%.” How will tariffs impact electric imports? In a statement published in late February, officials at ISO New England said they were seeking clarity from the federal government as to whether energy tariffs would apply to electricity and, if so, who exactly would be responsible for collecting the duties. Part of the concern from officials at ISO New England was that, as a nonprofit entity, they would have no way to pay the tariffs if the federal government came to collect from the organization. “In a worst-case scenario, the ISO could be forced to seek bankruptcy protection and the federal government could restrict or ban Canadian electricity imports into New England until the duties are paid,” officials warned in a separate February memo. In order to avoid such a scenario, the organization requested that the Federal Energy Regulatory Commission set up a process to assess the cost of any tariffs on importers of electricity, who would presumably in turn pass along the costs to the utilities and, eventually, electric customers. Mary Cate Colapietro, a spokeswoman for ISO New England, said that the organization had yet to receive an update on its request as of Thursday. In addition to direct imports of electricity, Canada also exports natural gas to New England through pipelines and ships that could also be made subject to tariffs, thus making it more expensive for power plants to burn fuel for their generators and further increasing costs. Katovich, the UConn professor, said that he estimated a 10% tariff on Canadian electricity would cause utility bills in New England to rise between 1% and 3%, assuming the costs are passed along fully to customers. In addition to its impact on utility bills, Katovich said that energy tariffs are also likely to spur on more generalized inflation across the region. “If electricity prices go up by 10% all sorts of goods that are produced here that use that electricity are also going to get more expensive,” he said. ...read more read less