Maine’s electricity consumers could see higher bills under President Donald Trump’s Canadian tariffs.
Trump said Thursday that the tariffs would go into effect Tuesday, with 25 percent levies on goods from Canada and Mexico, while the 10 percent tariffs on Chinese goods would rise to 20 percent. Canadian energy products would be subject to a 10 percent tariff. Canada and Mexico have vowed to retaliate with tariffs of their own.
He first introduced those tariffs on Feb. 1, but within days delayed them for a month.
The regional grid operator, ISO New England, is now warning states about the potential impact on electricity markets.
In a letter dated Feb. 26, Maria Gulluni, ISO New England’s vice president and general counsel, and Chris Hamlen, the ISO’s assistant general counsel for markets, said that tariffs between 10 and 25 percent could increase electricity costs for New England between $66 million and $165 million.
About 9 percent of the electricity for New England comes from either Canada or New York, according to ISO New England.
ISO New England plans to argue that electric energy should be exempt from tariffs, noting it has been historically treated as an “intangible good” and therefore not subject to import duties. But if the Trump administration persists, ISO New England will argue that regional grid operators shouldn’t bear that cost.
But questions remain over how to collect those duties, and Gulluni and Hamlen noted that ISO New England likely doesn’t have “sufficient cash on hand” to cover the cost of tariffs.
“In a worst-case scenario, the ISO could be forced to seek bankruptcy protection, and the federal government could restrict or ban Canadian electricity imports into New England until the duties are paid,” they wrote.
ISO New England plans to ask the Federal Energy Regulatory Commission to approve a plan to pass through those costs, effective March 1, ahead of the Trump administration imposing those tariffs.
That’s just the latest example of the potential consequences of the new tariffs on consumers here in the United States. Trump suggested in early February that Americans could feel “some pain” from his tariffs. Maine is poised to feel more of that pain than other states.
About 70 percent of imports come from Canada, and 30 percent of the state’s exports are destined to the north, including between $200 million and $400 million of lobster shipped to processors over the border annually.
Nearly all of Maine’s heating oil comes from Canada, and when Trump initially announced the tariffs, Irving Oil sent a notice to customers informing them that their bills would rise to offset the tariffs.
Unlike other parts of the country, New England has a much lower refinery capacity, meaning it relies more on Canada for refined products, while other regions source crude from Canada for processing domestically.
Patrick De Haan, head of petroleum analysis for GasBuddy, told the Bangor Daily News in early February that Mainers could see a 10- to 20-cent increase for a gallon of gas and a 20- to 30-cent increase per gallon of home heating oil.
