Tariffs on Canadian energy could hit power bills in the Northeast U.S.  

Though the details of the tariffs President Donald Trump has been threatening to impose on imports from Mexico and Canada are not entirely clear, the plan the president rolled out, then delayed, earlier this month included a 10% tax on energy imports from Canada.

If it takes effect, that policy is likely to increase energy costs for some U.S. residents, including people throughout New England and New York. 

Some of that region’s gas, oil, and electricity supplies come from north of the border. And on the electricity front in particular, utilities and policymakers have spent years working to bring more power down from the north. 

Already, some utilities rely more heavily than others on Canadian energy. One is Vermont Electric Co-op, in the northern part of the border state.

On a wall of the small electric utility’s control room in Johnson, Vermont, six monitors display a diagram of its system. Colored lines criss-cross the display’s black background, representing the power lines that deliver electricity to the co-op’s 40,000 customers.

“So this has pretty much all the high level switches and breakers and stuff that we can control,” said manager Isaac Gillen, pointing to one of the monitors. “You can see at the top, we have a Hydro-Quebec tie there.”

Hydro-Quebec is the utility on the other side of the Canadian border. Gillen said a connection to its grid in the town of Highgate, Vermont sends power throughout New England.

There are other, smaller connections exclusively between Hydro-Quebec and Vermont Electric Co-op’s system too, in rural Vermont towns that bump up against the international border: Derby, Norton, and Canaan.

“Back in the day when we actually used to have to go out and read meters physically, if you’re up in that Derby area, there’s times where, if you’re not paying attention, you just, you could slip right into Canada,” Gillen said.

Another display on the wall shows the total amount of power Vermont Electric Co-op is getting from Canada, said CEO Rebecca Towne.

“Right now, it’s almost 19 megawatts coming through, flowing through our ties to Hydro-Quebec,” she said. That accounts for about 40% of the utility’s total needs at that moment. Pretty average, Towne said.

According to Hydro-Quebec, it supplied 14% of New England’s electricity last month, a particularly cold January. It’s able to do that thanks to two transmission lines developed in the 1980s.

“We were coming out of an energy crisis, said Marc Montalvo, CEO of Daymark Energy Advisors, a consultant group based in Worcester, Massachusetts. “There was a lot of concern about diversification of fuel supply. Quebec had a very rich water resource.”

Meaning, there are lots of hydroelectric dams in the north of the province. For years, they’ve produced cheap surplus power. And for the last decade or so, New England and New York have been trying to get more of it.

After many delays, two new connections to the Hydro-Quebec grid are set to be completed by early next year.

“Each of them will bring enough energy to supply a million homes, one for, essentially, New England and Massachusetts, and the other one for New York City,” said Serge Abergel, chief operating officer of Hydro-Quebec’s U.S. energy services arm.

The lines will also be able to send power north, said Pierre-Olivier Pineau, a professor at HEC Montreal. So, as New England and New York add more solar and wind, which can also produce surplus power at times, “Quebec can basically import electricity, keep the water in the dams, and then that saved water can be used later on,” Pineau said.

That stored water can then generate power when solar and wind aren’t. In other words, Quebec can basically store power behind its dams for whenever New England needs it.

“The Northeast states shouldn’t see Quebec as a net exporter of electricity, but as a big battery to help balance their own market,” Pineau said. “And that big battery is already built.”

But accessing it could be more costly than anticipated, if tariffs on energy imports are applied to the electrons flowing across the U.S.-Canada border.

Tariffs could make fossil fuels in the region more expensive too. Right now, fuel oil for homes, gasoline and aviation fuel refined in New Brunswick, and some natural gas all cross the border.

“Vermont Gas takes nearly all of its physical gas supply from a connection at the Canadian border at Philipsburg, Quebec,” said Neale Lunderville, head of Vermont Gas Systems, which serves 56,000 customers in the northern part of the state — including, full disclosure, this reporter.

Lunderville said there’s no doubt about who would foot the bill for natural gas tariffs.

“We pass the cost of gas directly to our customers,” he said. “A 10% tariff on Canadian energy will mean a direct rate impact for our customers.”

In the meantime, he’s been looking at ways to mitigate that impact, but he’s not particularly hopeful they’ll be able to limit costs to customers.