US-Canada Border Power Restrictions: A Warning for Grid Stability from Industry Watchdogs

Canada and the US share a close relationship when it comes to energy. They often rely on each other for electricity to meet demand. But now, a trade dispute could jeopardize this balance, according to the North American Electric Reliability Corporation (NERC). They monitor the power systems in both countries and warn that limiting electricity and gas supplies could lead to serious problems.

NERC’s CEO, Jim Robb, cautioned that if either country threatens to cut off exports, it could create issues for Canadian provinces that buy US power and for US states that rely on Canadian electricity. He emphasized that both nations benefit from this cross-border energy trading.

In response to recent tariffs imposed by the US on Canadian imports, Canadian officials have threatened to impose their own tariffs on electricity exports to the US. Ontario’s premier, Doug Ford, stated he would consider adding a surcharge of 25% on electricity exported to the US if these tariffs continue. He even mentioned the possibility of shutting off power supplies altogether.

Ontario supplies electricity to about 1.5 million residents in states like New York, Michigan, and Minnesota. Other provinces also provide power to various US states, making this energy exchange crucial.

In 2022, the US imported around $2.1 billion worth of electricity from Canada, according to BloombergNEF. While the total cross-border electricity trade is relatively small, it plays a key role in balancing supply and demand on the grid. Ensuring this balance is crucial, especially as demand for electricity grows rapidly, partly due to advancements in technologies like artificial intelligence.

Officials in several US states are worried about the impact of a potential power cut. Some have voiced concerns that disruptions could lead to immediate consequences, including higher prices for consumers. For instance, a senior energy official in Vermont highlighted that a shutdown could leave many residents unable to heat their homes during winter.

It’s unclear how Ontario would implement these restrictions or tariffs. Ontario’s energy ministry has indicated they can adjust exports through various legislative or regulatory measures. Energy economist Andrew Leach noted that while some measures could be taken to limit production or temporarily take lines out of service, much of the regulation concerning exports falls under federal control. This means any significant changes would likely involve higher-level negotiations and decisions.

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