Trump’s Canadian Tariffs Could Impact Wisconsin Energy Prices
Wisconsin utilities import electricity from Manitoba province, but say it's a fraction of total energy.
Official portrait of President Donald J. Trump, Friday, October 6, 2017. Official White House photo by Shealah Craighead. Photo is in the Public Domain.
Threats of escalation in President Donald Trump’s trade war against Canada sparked concerns this week about how the conflict could affect electric bills. But state utilities say they only receive a tiny fraction of their energy from Canada.
The Canadian province of Manitoba is part of the Midwest transmission grid’s coverage area, along with Wisconsin and 14 other states.
Wisconsin’s neighbors to the east and west, Michigan and Minnesota, started the week bracing for an additional 25 percent surcharge on electricity they buy from the Canadian province of Ontario. Those surcharges were paused on Tuesday after a back and forth between Ontario officials and the Trump administration.
While Ontario’s plan is paused, Manitoba sells electricity to some Wisconsin utilities and had floated a similar 25 percent surcharge last week.
It’s unclear how much Wisconsin ratepayers would be affected if Manitoba moved forward with the charge. Last year, less than 1 percent of the electricity that came onto the Midwest transmission grid came from Canadian imports, according to a statement from the Midcontinent Independent System Operator, or MISO.
Even so, the grid operator has not yet received guidance from the Trump administration about whether 25 percent tariffs on most Canadian imports, set to begin next month, will apply to electricity.
“It is uncertain whether or when this will be resolved,” a MISO spokesperson said. “MISO has received no confirmation from federal agencies regarding the duties’ applicability to electricity or who will be responsible for paying or collecting them.”
Beyond electricity imported from Canada, tariffs on other imports could increase costs for utilities, resulting in higher costs for customers, according to a nonprofit ratepayer advocacy group.
What would surcharges mean for Wisconsin?
In Manitoba, officials have floated the idea of adding their own 25 percent surcharge on hydroelectric exports to the United States. But on Monday, Manitoba Premier Wab Kinew said officials were not yet ready to do so.
“This is a really serious issue we’re facing with [tariffs] and we’re prepared to use this tool,” Kinew said Monday, according to the Winnipeg Free Press.
That threat could pose issues for Wisconsin ratepayers, according to Tom Content, executive director of the Citizens Utility Board of Wisconsin.
“It’s definitely a concern because our grid is so interconnected with Manitoba, given that they’re part of one of the regional transmission grids,” he said.
Meghan Sovey-Lashua, a spokesperson for the Public Service Commission, said the agency “can’t say with certainty” how Wisconsin would be impacted.
“This continues to be a rapidly evolving situation that we are monitoring closely,” Sovey-Lashua said in an email.
A MISO spokesperson said via email that the amount of energy supplied by Canadian imports last year was very small, about the same amount that was generated by one power plant.
“MISO manages the loss of power plants like this every day to ensure reliability across our footprint,” the spokesperson said.
At least two of Wisconsin’s largest utilities have agreements to buy energy from the province-owned Manitoba Hydro utility.
Xcel Energy, a utility that serves customers in the western part of the state, says it does not import electricity or natural gas directly from Ontario, but it does buy energy from Manitoba. In 2011, Wisconsin Public Service agreed to purchase 100 megawatts from Manitoba Hydro between 2021 and 2027, according to RENEW Wisconsin.
In an email, Xcel spokesperson Theo Keith said the utility estimates “less than 2 percent” of the energy serving its customers in the Upper Midwest comes from Manitoba.
“If additional tariffs are imposed, we would assess the potential impacts on service reliability and costs, and — where possible — we would consider purchasing from other sources,” Keith said.
Likewise, Brendan Conway, a spokesperson for WEC Energy Group, the parent company of Wisconsin Public Service, said nearly all of the energy that its customers use is generated in Wisconsin. Conway says the utility’s agreement with Manitoba Hydro “is a small component” of its portfolio.
“Any potential tariff impact on generation sources from Canada would be limited,” Conway stated. “We do not expect future tariffs would have any impact on our ability to safely and reliably serve our customers.”
How else could the trade war impact utility bills?
Oil and gas from Canada are expected to face 10 percent tariffs next month, barring a deal to avoid those duties.
Wisconsin imports natural gas from Canada, Oklahoma, Texas, Louisiana and Kansas, according to the U.S. Energy Information Administration. As of 2023, natural gas made up about 43 percent of Wisconsin utilities’ generating capacity, according to a report by state regulators.
Canadian crude oil is also delivered to the Superior Refinery via a pipeline system, according to the Energy Information Administration. That refinery also gets oil from North Dakota.
Refineries in the Great Lakes region are “particularly dependent” on Canadian oil, and the 10 percent duties on those imports could increase gas and diesel prices by 10 to 25 cents per gallon, according to GasBuddy.
Trump’s 25 percent tariff on steel and aluminum imports also took effect Wednesday after they were announced last month. Content says those tariffs could increase construction costs for Wisconsin utilities building renewable energy projects and new power plants, potentially leading to cost overruns on already approved projects.
“The hope is that the tariffs won’t stick,” Content said. “The hope is that it won’t be a long-term thing.”
Editor’s note: The Citizens Utility Board of Wisconsin is a sponsor of Wisconsin Public Radio.
Could Trump’s trade war affect Wisconsin’s electric grid? was originally published by Wisconsin Public Radio.
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