Ontario electricity surcharge to have little effect in Michigan, officials say

• Ontario Premier Doug Ford announced a 25% surcharge on energy exports to the US
• Michigan gets less than half a percent of its electricity from Ontario
• Ford has threatened to cut off power altogether if the trade war continues to escalate. Such a move could make Michigan’s grid less reliable

Even as Ontario increases the price of the electricity it sends to Michigan by 25%, Michiganders aren’t likely to feel much of a difference, Michigan’s utility regulator told Bridge Monday. 

Ontario Premier Doug Ford announced that effective Monday, electrical producers in the province will have to add a 25% surcharge to electricity they export to the US.

It’s the latest in a series of threats and actions in a trade war between the US and Canada, one of its closest allies.

“I feel terrible for the American people, because it's not the American people who started this trade war. It's one person who's responsible. That's president (Donald) Trump,” Ford said at a Monday morning press conference. 

Michigan gets little of its electricity from Canada, but with tensions ongoing, Ontario has threatened to disconnect from the US, something that could harm the reliability of state and regional electrical grids. 

The provincial government estimates the surcharge will generate more than $200,000 a day for Ontario.

How much electricity Michigan gets from Ontario

Not much. Less than half of 1% of Michigan’s electricity in 2024 was from Ontario, according to the Midcontinent Independent System Operator, or MISO, which oversees the electric grid in 15 US states. Both DTE and Consumers Energy, the state’s largest two electrical utilities, have said they don’t use electricity from Canada, nor does the Lansing Board of Water and Light.

Most of the electricity that flows into Michigan from Canada is passed on to other states. Over the infrastructure that connects Michigan to Ontario in 2023, Ontario exported close to 8,000 gigawatt-hours of electricity, and imported less than 1,000 gigawatt-hours, according to the Ontario Energy Board.

Related:

• Trump tariffs spark ‘trade war’ with Michigan’s biggest trade partners
• Michigan automakers get break on Trump tariffs — for now
• Michigan braces for Trump tariffs on Canada, a $77B trade partner

There are four international transmission lines connecting Michigan with Ontario: between Marysville in St. Clair County and Sarnia; between Detroit and Windsor; and two between East China Township in St. Clair County and Corunna. All are located at Detroit Edison facilities on the Michigan side.

This arrangement gives the two countries the ability to transfer about 2,000 megawatts between Michigan and Ontario at a time, according to an analysis from GridLab, a nonprofit that focuses on clean energy implementation.

If the economic war between Canada and the US becomes protracted, however, that could have the potential to hamper Michigan’s own clean energy goals. The state has set a goal to achieve 100% carbon-free energy by 2040.

GridLab wrote “it will be easier for Michigan to achieve its clean energy goals” if they can both import and export renewable energy when they need additional capacity or have a surplus of electricity, and recommended increasing the interconnections between Michigan and Ontario for more flexibility.

Ford added he “will not hesitate” to increase the surcharge or “shut the energy off completely” if the US escalates the trade war. That’d mean severing those connections, at least temporarily.

“Any action to limit or disrupt these flows would remove a layer of protection and make all of us — Canadians and Americans alike — more vulnerable to grid-scale outages,” Michigan Public Service Commission spokesman Matt Helms said in a statement.

Ford did not say under what conditions Ontario would sever its connections with the US grid, but said if additional measures are taken by the Trump administration he would do “whatever it takes to maximize the pain against the Americans,” while emphasizing Trump’s policies are the cause of the actions.

How it might effect costs

Not a whole lot, said Helms. 

“The ultimate impact on Michigan customers is likely to be small,” Helms told Bridge in a statement.

Instead, Michigan’s regulators are more concerned about the economic spat damaging the reliability of Michigan’s electrical grid.

Electricity from Ontario flows into Michigan and to other midwest states before returning to Canada via other lines, mostly near Lake Erie in New York, and serves as a means of managing electrical load.

Trump tariff background

Ford’s energy price hikes are in response to Trump’s issuance of broad, 25% tariffs on most goods from Canada.

Aggressive and restrictive trade policies have been a tentpole of Trump’s domestic agenda, as he has argued tariffs are the key to getting corporations to return manufacturing to the United States.

Commerce Secretary Howard Lutnick has sought to calm worried financial markets, which have sunk in response to the tariffs, by predicting Trump will “work something out” with Canada and Mexico.

"Tariffs are about making America rich again and making America great again,” Trump said. “And it's happening, and it will happen rather quickly. There'll be a little disturbance, but we're okay with that. It won't be much.”

His administration offered a reprieve for Michigan’s auto industry last week, which has supply chains tightly interwoven with Canada. One analyst had predicted a $4,000 to $10,000 increase in the price of new cars under the tariffs. But the pause, which is extended to many goods covered by the USMCA free trade agreement, is set to expire April 2.

Trump, in multiple Michigan rallies during the 2024 presidential campaign, had promised residential electric bills would be cut in half within the first year of his presidency.