Ontario on Monday imposed a 25% surcharge — or about $7/MWh after converting to U.S. dollars — on power exports to the United States that the province expects will average roughly $208,000 to $278,000 a day.

Ontario could increase its “tariff response charge” or stop electricity exports to the U.S., depending on the Trump administration’s actions, according to the province.

Ontario’s move to institute fees on its U.S. exports is in retaliation to tariffs imposed by the Trump administration on Canada, according to Ontario Premier Doug Ford.

“President Trump’s tariffs are a disaster for the U.S. economy. They’re making life more expensive for American families and businesses,” Ford said in a press release. “Until the threat of tariffs is gone for good, Ontario won’t back down.”

Ontario generators sold about 12 million MWh to the U.S. in 2023 across the three electric interconnections between the province and the U.S., according to a letter sent Monday to Ontario’s grid operator from Ontario Minister of Energy and Electrification Stephen Lecce.

Under Ontario’s plan, U.S. entities importing power from the province will pay the cost of the exported electricity, including the 25% surcharge, to the electricity market participant that exported the electricity. The Independent Electricity System Operator of Ontario will collect the surcharge from the market participant.

President Trump on March 4 imposed 25% tariffs on imports from Canada and Mexico, plus a 10% fee on energy imports. Two days later he delayed the tariff on some imports, but kept the tariffs on energy imports. However, the energy tariff applies to crude oil, natural gas and other products, according to a March 6 Federal Register notice, which doesn’t mention electricity.

The tariffs on energy imports will drive up utility costs, disrupt markets and create uncertainty, New York Gov. Kathy Hochul, D, and Senate Minority Leader Chuck Schumer, D-N.Y., said in a letter Monday to state energy agencies.

“They are not only economically harmful but also dangerously short-sighted,” Hochul and Schumer said. “Worse yet, the policy is so poorly written that it remains unclear whether electricity imports are subject to the tariff, leaving our grid operators and utilities in limbo.”

Among other things, they asked state agencies to consider adding a one-line “Trump tariff” cost indicator on utility bills.

ISO-NE, NYISO tariff plans garner support

Meanwhile, the market monitors for ISO New England and the New York Independent System Operator supported the grid operators’ plans to establish a process for potentially collecting tariffs on power imports from Canada, according to filings made on Monday at the Federal Energy Regulatory Commission.

Tariffs on Canadian imports of electricity would affect system flows and the power supply mix, market costs and prices paid by consumers, ISO-NE’s market monitor said.

“Clarity is important to enable market participants and system operators in the wholesale power markets to assess impacts, and to incorporate and respond to the best available information when making business decisions — and ultimately that the consequences are consistent with reliability and affordability for consumers,” the market monitor said.

Electricity imports from Canada made up 5% to 14% of ISO-NE’s annual power supply over the past five years, the market monitor said. ISO-NE estimates a 10% tariff would cost $66 million a year.

NYISO proposed collecting the import duty with a deduction to the revenue paid to the importer, the grid operator’s market monitor said, noting it is unclear whether import tariffs on electricity will be imposed.

Public Citizen urged FERC to reject the ISO-NE and NYISO proposals, saying the grid operators lack the authority to collect tariffs.

The U.S. Customs and Border Protection is responsible for duty assessment and collection, the consumer watchdog group said. “To date, the CBP has failed to provide clear and enforceable guidance establishing a legally operable tariff classification or collection mechanism for Canadian hydroelectric imports,” Public Citizen said. “Any attempt to impose duties without first addressing these deficiencies is procedurally defective and inconsistent with trade law.”

Sen. Richard Blumenthal, D-Conn., also said FERC should dismiss the New England proposal. “FERC should not impose this tax collecting authority onto ISO-New England and therefore make it harder for consumers to pay their electric bills,” Blumenthal said.