You pay: ISO-New England prepares to collect Trump tariffs on Canadian power.
Canada will pay zero tariffs on the electricity New England imports from our northern neighbor. President Donald Trump has often professed his love for tariffs and always denies Americans will pay them. New England consumers of electricity will learn what we have always known: we pay the tariffs.
Electricity does not arrive at a port or stop at a border crossing. The tens of millions of dollars that the Trump tariffs impose on New England ratepayers will have to be collected by an entity. In the long run, a different collection system may be required to perform the task, but at the start ISO-New England, a non-profit organization, believes it may be tagged with the expensive task. It is required to prepare for the tariffs that are scheduled to begin next week.
Here is the ISO-New England statement:
ISO New England intends to file this week with the Federal Energy Regulatory Commission (FERC) a proposed mechanism by which the ISO can, if directed by the federal government, collect customs duties related to electricity imported from Canada and sold into ISO-administered markets.
We believe this filing is prudent in light of President Donald J. Trump’s executive orders and recent statements.
ISO New England 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.
However, given the uncertainty surrounding these issues, the ISO deemed it necessary to make this filing to ensure a process is in place in the event the federal government determines the duties apply to electricity and that ISO New England is responsible for playing a role in their collection.
Failure to have a procedure in place could result in potentially serious adverse consequences for the region’s wholesale markets.
The ISO’s proposal
The ISO’s proposal would set up a process by which, in the event any future duty is applied to imported Canadian electricity, importers of that electricity for sale into New England’s energy markets are assessed the cost of such duties. The process would only kick in if a federal agency required ISO New England, via invoice, to pay the duty, and is intended to be temporary, allowing 120 days for the ISO and stakeholders to file a replacement process that is specific to terms and conditions of the imposed import tariff.
Published February 28, 2025.