Canada's threat to hike electricity prices highlights U.S. reliance on imported power
MARY LOUISE KELLY, HOST:
Ontario, Canada, threatened to hike prices on electricity exported to the U.S. this week, just before President Trump's steel and aluminum tariffs were set to take effect. The threat would have boosted Americans' power bills. Now, ultimately, it did not pan out, but the episode did highlight U.S. reliance on imported Canadian power. NPR's Joe Hernandez explains why some American states buy electricity from their northern neighbor.
JOE HERNANDEZ, BYLINE: A few days ago, Ontario Premier Doug Ford said he would slap a 25% surcharge on electricity exported from the province to Michigan, New York and Minnesota.
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DOUG FORD: If necessary, if the United States escalates, I will not hesitate to shut the electricity off completely.
HERNANDEZ: It prompted President Trump to say he would double the coming tariffs on Canadian aluminum and steel. Ultimately, the two sides backed down from their threats, but it brought to light the long-standing arrangement between the U.S. and Canada, which have an interconnected power system and have traded electricity with each other for decades.
CY MCGEADY: You have cities and urban areas that are close neighbors, and you have electric systems that are close neighbors. There's a sort of imaginary line that runs between them called the border.
HERNANDEZ: Cy McGeady is a fellow at the Center for Strategic and International Studies. He says large, integrated power systems, like the one the two countries share, are more resilient and cheaper for consumers.
MCGEADY: So there's, like, a basic economic factor that drives grid integration everywhere.
HERNANDEZ: In 2023, the U.S. spent over $3 billion on electricity from Canada, the majority of which comes from the country's hydroelectric plants. The U.S. also sold Canada about a billion dollars' worth of electricity. Certain parts of the U.S. are more likely to buy Canadian power, such as New York as well as states in New England, the Midwest and the Pacific Northwest. If power sales between the U.S. and Canada are disrupted, experts say it'll be consumers who see the charges. Asa McKercher is a professor of U.S.-Canada relations at St. Francis Xavier University in Nova Scotia.
ASA MCKERCHER: And that's what makes this tariff war really self-defeating for both countries - is the fact that we benefited from access to cheap energy.
HERNANDEZ: Ford is set to meet with Commerce Secretary Howard Lutnick this week. But for now, Ontario electricity costs will remain at their current rate. Joe Hernandez, NPR News.
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