Dive Brief:

• The New York Independent System Operator and ISO New England both made tariff-related filings with the Federal Energy Regulatory Commission on Friday in advance of a 10% tariff on Canadian electricity imports that is expected to take effect Tuesday.
• The tariff on Canadian energy resources is part of a broader set of duties on imports President Trump announced in January and subsequently paused for 30 days. The two countries “have one of the most integrated international electric grids in the world,” New York ISO told FERC.
• The tariffs could add millions of dollars to customer bills. The grid operators say they don’t believe they have a role in collecting or remitting the duties. “However, given the uncertainty surrounding these issues, the ISO deemed it necessary to make this filing,” ISO New England said.  

Dive Insight:

There is significant uncertainty surrounding the tariffs on imported energy, but the two northern grid operators say they must be prepared. Both asked for expedited comment periods and orders from the commission.

In a Friday statement, ISO New England said it was filing with FERC a proposed mechanism allowing it to, “if directed by the federal government, collect customs duties related to electricity imported from Canada and sold into ISO-administered markets.”

The filing is “prudent” in light of Trump’s executive orders and recent statements, the grid operator said. However, it added the ISO “also believes that the custom duties described by the Trump Administration do not appear to apply to electricity and that, even if they do, ISO New England would not be responsible implementing them.”

Similarly, New York ISO said its own role in collecting the tariffs is uncertain. “There is an urgent need for clarity and certainty regarding the recovery and allocation of potential duty-related costs,” it said.

“It is not yet clear whether imports of electrical energy from Canada are subject to the Canadian Tariff Order or, if they are, whether the NYISO will be required to play any role in collecting or remitting duties,” the grid operator said in a statement. “The NYISO believes that there are strong legal and policy arguments that the answer to both of these questions is ‘no.’”

The tariffs could add tens of millions of dollars or more to customer bills.

According to the New England grid operator, an estimate using import data from the last five years “indicates a 10 percent to 25 percent tariff on Canadian electricity imports could amount to Import Duties of between $66 [million] and $165 million annually.”

Under the New England proposal, market participants selling Canadian electricity into the ISO-administered market “will be assessed the cost of such Import Duties, which the ISO will collect based on the entity’s external transaction sales into New England.” The grid operator asked FERC to issue an order by the end of March, with an effective date of March 1.

The New York grid operator said its tariff provision proposals would “address the possibility that the Canadian Tariff Order could result in the NYISO having to collect and remit duties on Canadian electricity imports in the near future and potentially on short notice.”

NYISO is interconnected with two Canadian system operators, Ontario’s Independent Electricity System Operator and Hydro-Québec, allowing the import of up to 4,600 MW, the grid operator told FERC. The interconnections also support “substantial” exports, the ISO said.

“Trade across the interties is robust. In 2024, New York State imported 7.7 TWh of Canadian electricity, which was more than any other state,” the grid operator said. “That electricity was valued at hundreds of millions of dollars.”