The Ontario government announced it’s charging an extra 25 percent on all electricity exports to the U.S. Monday.
The provincial government says that’ll impact 1.5 million homes spread across Michigan, Minnesota, and New York. Ontario said that could cost up to $400,000 each day the surcharge is in place, blaming tariffs from the Trump Administration for the move.
Despite Ontario naming Michigan in its announcement, state regulators expect the move could more likely be felt on a regional scale.
“While the vast majority of Michigan’s electricity is either produced by the electric utilities or purchased under long-term power contracts, the imposition of these tariffs could have some impact on prices in the regional energy markets, though the ultimate impact on Michigan customers is likely to be small,” a written statement from the Michigan Public Service Commission read.
The agency cast doubt on whether any utilities in the state actually purchase electricity from Canada to begin with.
In a written statement, DTE Energy, one of the state’s largest utility companies, said it was prepared to mitigate any pricing concerns.
“DTE continues to monitor the evolving tariff policies with Canada. We self-generate the majority of electricity required to serve our customers’ needs, with the small amount that we do purchase coming from the United States.” DTE Energy said.
In a written statement, the Michigan Public Service Commission said “the vast majority” of the state’s electricity is produced by the state’s utilities themselves or through long term contracts.
The Michigan Public Service Commission is warning, however, that Michigan’s electric grid is tied to several other states and one Canadian province, Manitoba. It said Michigan’s regional operator and Ontario’s regional operator coordinate that flow of electricity.
“Any action to limit or disrupt these flows would remove a layer of protection and make all of us – Canadians and Americans alike – more vulnerable to grid-scale outages,” the MSPC statement said.
Brandon D. Morris is with the Midcontinent Independent System Operator, which operates Michigan’s electric grid.
“MISO is still reviewing Ontario’s recent decision to apply an export tax on electricity, which will be collected on the Canadian side of the border,” Morris said in a statement.
