American Dependence on Canadian Electricity: An Integrated Cross-Border Energy Relationship
The United States and Canada share one of the world's most integrated electricity systems, with a complex network of transmission lines facilitating a multi-billion dollar cross-border trade relationship. While electricity exchanges between the two nations represent a relatively small percentage of their respective total generation, this power-sharing arrangement delivers crucial benefits for grid reliability, economic efficiency, and clean energy development. This report examines the extent of American dependence on Canadian electricity, the infrastructure enabling this relationship, recent shifts in trade dynamics, and the strategic considerations shaping the future of this vital energy partnership.
The electricity relationship between Canada and the United States represents a significant, though often overlooked, component of the broader North American energy integration. Historically, Canada has exported substantially more electricity to the United States than it has imported. In 2019, the United States imported 52 million megawatthours (MWh) of electricity from Canada while exporting just 14 million MWh back to its northern neighbor10. This imbalance reflects Canada's abundant hydroelectric resources and the geographical alignment of Canadian generation centers with major US population centers along the border.
The relationship's economic significance is substantial, with approximately 70 terawatthours (TWh) of electricity crossing the border annually, representing a trade relationship valued at roughly $3 billion8. In 2020, Canada supplied a remarkable 93% of all US electricity imports, highlighting the near-exclusive nature of this bilateral energy relationship3. While these imports represent less than 1% of total US electricity consumption, they play a disproportionately important role in certain regions and situations111.
However, recent years have witnessed a notable shift in this traditional pattern. In 2023, the United States remained a net importer of Canadian power on an annual basis, but the volume fell dramatically from 42 TWh in 2022 to just 15 TWh in 20231. This 64% reduction represents one of the most significant year-over-year changes in this longstanding energy relationship. Even more remarkably, by September 2023, the United States temporarily became a net electricity exporter to Canada, a reversal that continued for five of the next nine months1.
The physical infrastructure enabling this cross-border electricity exchange is extensive and sophisticated. The United States and Canadian electric power grids are connected through approximately 37 major transmission lines (those greater than 69 kilovolts) spanning from New England to the Pacific Northwest4. These interconnections facilitated the exchange of 82.4 million MWh of electricity in 2016, enough to power 7.5 million average households4.
From a regulatory perspective, the Canada Energy Regulator (CER) oversees 86 international power lines connecting Canadian provinces to the US electricity grid2. These vary in length, with many spanning just a few kilometers from substations to various connection points along the international border. The geographical distribution of these connections reflects regional energy patterns: British Columbia links to the Pacific Northwest grid; Manitoba connects to the US midcontinent grid; Ontario ties into both the US midcontinent and eastern grids; Quebec connects to the US eastern grid; and New Brunswick links to the US New England grid2.
Three of the eight North American Electric Reliability Corporation (NERC) reliability regions span both countries, effectively integrating the Canadian grid with the United States11. This institutional integration complements the physical infrastructure, creating a seamless operational environment despite the international border. In specific regional contexts, the connections are particularly substantial. The New York Independent System Operator (NYISO), for instance, is interconnected with two Canadian system operators—Ontario's Independent Electricity System Operator and Hydro-Québec—allowing for imports of up to 4,600 MW15.
The integrated electricity grid provides numerous strategic advantages to both countries, though our focus here is on the benefits to the United States. First and foremost is enhanced grid reliability and resilience. The interconnected system allows both countries to share reserves and guard against cascading outages, providing an important buffer against system failures11. During extreme weather events, such as those experienced in the United States in 2021, Canadian electricity companies were able to send extra power to regions in need, helping to maintain service continuity during critical periods8.
A particularly valuable feature of this relationship is the seasonal complementarity between the two countries' electricity demand patterns. Canadian electricity load typically peaks in winter due to electric heating demands, while the United States experiences its highest demand in summer months when air conditioning usage surges11. Rather than each country building excess capacity that would sit idle for portions of the year, this complementary pattern allows for more efficient resource utilization and capital investment11.
The economic benefits of this integration are substantial. In New England alone, electricity imports from Quebec and New Brunswick contribute to lower wholesale power costs and deliver annual economic benefits estimated between $103 million and $471 million4. More broadly, the integrated system creates economies of scale that lower operating costs and ultimately reduce electricity prices for end-users in both countries4.
Increasingly, this relationship also supports clean energy transition goals. Canadian hydropower, with its inherent storage capability, can help US states integrate greater quantities of intermittent renewable power like wind and solar4. States like New York and Massachusetts are specifically looking to Canadian hydropower to help achieve their clean energy targets, demonstrating the growing importance of this cross-border relationship in addressing climate objectives4.
The traditional pattern of Canadian electricity dominance in this relationship has undergone significant changes since 2023. Several factors have contributed to this shift. Drought conditions in western Canada reduced inflow to reservoirs, constraining the country's hydropower generation capacity, which forms the backbone of its electricity exports1. Concurrently, lower natural gas prices in the United States reduced power prices, making US electricity more competitive in the cross-border market1.
These factors dramatically altered the trade balance. Monthly average exports from the United States to Canada in 2023 increased 70% year-over-year to 1,809 gigawatthours (GWh), while monthly average imports from Canada decreased by 36% to 3,315 GWh1. The value of power sales from Canada to the United States totaled $3.2 billion in 2023, nearly 30% less than in 2022, while electricity exports from the United States to Canada increased by $454.5 million to reach $1.2 billion1.
Regional dependencies remain significant despite these shifts. In 2024, New York State imported 7.7 TWh of Canadian electricity, more than any other state, with this power valued at hundreds of millions of dollars15. This regional concentration of imports highlights the uneven distribution of US dependence on Canadian electricity, with northeastern and northern border states generally more reliant on these imports than other regions.
The integrated electricity relationship now faces unprecedented challenges, most notably in the form of potential trade tensions. Former President Donald Trump's administration proposed imposing a 10-25% tariff on Canadian imports, including electricity71415. This prospect has introduced significant uncertainty into the traditionally stable relationship.
The potential economic impact of such tariffs could be substantial. According to ISO New England, a 10-25% tariff on Canadian electricity imports could amount to between $66 million and $165 million annually in additional costs15. These costs would ultimately be passed on to consumers, potentially offsetting many of the economic benefits the integrated grid has historically provided.
In response to these tariff threats, Canadian officials have suggested potentially disruptive countermeasures. Ontario Premier Doug Ford notably threatened retaliation by "cutting off their energy going down to Michigan, going down to New York State and over to Wisconsin"7. British Columbia's Premier David Eby similarly threatened to restrict electricity exports if the tariffs were implemented14. While such threats may be primarily political posturing, they highlight the potential vulnerability created by cross-border dependencies.
Beyond immediate trade tensions, the relationship faces structural challenges. Canada's electrical infrastructure is not a unified national network but rather a patchwork of provincial grids, many with stronger north-south ties to the US than east-west connections to other Canadian provinces56. This configuration creates strategic vulnerabilities, as disruptions originating in the US can propagate across the Canadian system. The 2003 Northeast Blackout dramatically illustrated this vulnerability, affecting Ontario while Quebec—which operates an independent interconnection—remained unaffected56.
These cross-border dependencies also create cybersecurity concerns. If US regulatory agencies like the Department of Energy or the Federal Energy Regulatory Commission face budget constraints or policy shifts, oversight of grid security could weaken, potentially exposing both countries to reliability threats56.
Looking ahead, several factors will shape the evolution of American dependence on Canadian electricity. Climate and clean energy objectives will likely increase the value of Canadian hydropower as a complementary resource to intermittent renewables. Simultaneously, energy security concerns on both sides of the border may prompt reconsideration of the degree of integration that has characterized the relationship to date.
Some Canadian officials are contemplating reducing reliance on US interconnections and developing Canada-only grid systems56. Quebec already operates a largely independent electricity network, providing a potential model for greater Canadian energy sovereignty56. However, implementing such changes across Canada would require significant investment and could take a decade or more to complete56.
For the United States, particularly northern border states, any substantial reduction in Canadian electricity imports would necessitate developing alternative generation resources or transmission capabilities. The integrated nature of the grid means that abrupt changes would create significant challenges for reliability and price stability.
Grid operators are already preparing for potential disruptions. Both the New York Independent System Operator and ISO New England have filed tariff-related proposals with the Federal Energy Regulatory Commission in advance of possible duties on Canadian electricity imports15. While expressing uncertainty about their role in tariff collection, these filings indicate the seriousness with which grid operators view the potential changes to this longstanding relationship.
The electricity relationship between the United States and Canada represents a complex balance of dependence and mutual benefit. While traditional patterns showed greater US reliance on Canadian electricity, recent shifts demonstrate the dynamic and evolving nature of this cross-border energy integration. The relationship delivers substantial benefits in terms of reliability, economic efficiency, and environmental objectives, yet also creates vulnerabilities through cross-border dependencies.
The future of American dependence on Canadian electricity will be shaped by a combination of market forces, policy decisions, and strategic considerations on both sides of the border. As both countries pursue clean energy transitions, the complementary nature of their electricity systems may become even more valuable. However, energy security concerns and potential trade tensions could push toward greater independence. The ideal path forward likely involves maintaining the benefits of integration while developing appropriate safeguards to address the strategic vulnerabilities that come with cross-border energy dependence.
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