ISO-NE takes steps to prepare for potential duties on Canadian electricity

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

We believe this filing is prudent in light of President Donald J. Trump’s executive orders and recent statements. 

ISO New England also believes that the custom duties described by the Trump Administration do not appear to apply to electricity and that, even if they do, ISO New England would not be responsible implementing them. 

However, given the uncertainty surrounding these issues, the ISO deemed it necessary to make this filing to ensure a process is 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. 

Failure to have a procedure in place could result in potentially serious adverse consequences for the region’s wholesale markets. 

The ISO’s proposal 

The ISO’s proposal would set up a process by which, in the event any future duty is applied to imported Canadian electricity, importers of that electricity for sale into New England’s energy markets are assessed the cost of such duties. The process would only kick in if a federal agency required 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 that is specific to terms and conditions of the imposed import tariff.  

Next steps 

ISO New England intends to request an order from FERC by March 30, with an effective date of March 1 for the proposal, to ensure it is in place before any duties are imposed.  

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.