The Canadian province of Ontario, known for exporting electricity to the United States, decided to increase energy prices for three states by 25 percent starting March 10, in retaliation for tariffs imposed by President Donald Trump. Ontario instructed its grid operator to add a charge of 10 Canadian dollars per megawatt-hour to the electricity exported to Minnesota, Michigan, and New York.
"Believe me when I say I don't want to do this," expressed the government's statement. Prices in the spot electricity markets in the United States are based on short-term supply and demand, allowing buyers the freedom to choose between different sellers. Ontario expects to collect up to 400 thousand Canadian dollars a day with this surcharge, intended to support local workers, families, and businesses.
Melanie Joly, Canada's Minister of Foreign Affairs, commented that "if the premiers use tools that benefit us, that's good news." New York imported about 4.4 percent of its electricity from Canada in 2023, while for Minnesota and Michigan, the percentage is even lower.
Brandon Morris, spokesperson for the regional grid operator, mentioned that in 2024, less than 1 percent of the total energy supplied through Canadian imports and less than half of that amount came from Ontario.
Ontario has seven transmission connections with New York, four with Michigan, and one with Minnesota. Citizens of New York, affected by rising prices, are seeing their energy bills increase, making direct accusations against President Donald Trump for the situation.
Premier Doug Ford promised the tax last week after the imposition of tariffs by the U.S. on Canadian products. Although Ontario's decision may hold more symbolic value than economic, Ford stated that they will comply with the measure despite the exemptions granted by the White House.
In the context of the ongoing trade war, New York's clean energy goals are threatened, adding to the economic and political challenges both countries face.
