FERC accepts ISO-NE proposal regarding potential Canadian tariffs

The Federal Energy Regulatory Commission (FERC) has approved a mechanism by which ISO New England can, if directed by the federal government, collect customs duties related to electricity imported from Canada and sold into ISO-administered markets.  

Much uncertainty remains regarding if and how tariffs on Canadian electricity may be implemented. Based on legal precedent, ISO New England does not believe the customs duties described by the administration apply to electricity. Further, if the duties do apply to electricity, the ISO maintains it would not be the entity responsible for implementing them.  

However, given the questions surrounding possible tariffs, the ISO deems it is necessary to have a mechanism 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.  

In accepting the ISO’s proposal, FERC made no finding with regard to these issues. 

The approved process 

FERC’s approval establishes a process by which, in the event any future duty is applied to imported Canadian electricity, importers of that electricity for sale in New England’s energy markets are assessed the cost of such duties. The process only kicks in if a federal agency requires 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 specific to terms and conditions of the imposed import tariff.  

In the event the process is triggered, FERC has further ordered ISO New England to make additional informational filings. As accepted, the ISO’s proposal is effective for any costs incurred for market transactions on or after March 1.  

This is a complex situation with many moving parts, and the ISO is committed to maintaining ongoing dialogue with our stakeholders, state officials, and the federal government.