If Ontario Premier Doug Ford decides to make good on his threat to cut off power to 1.5 million homes and businesses in the United States, he will need to ramp down the energy produced in his province.
On Monday, Ford introduced a 25 per cent surcharge on energy exported from Ontario to Michigan, Minnesota and New York as a response to tariffs on Canadian products brought in by the white house.
Those surcharges — expected to raise up to $400,000 per day — may not be the end of the dispute.
“If the United States escalates, I will not hesitate to shut the electricity off completely,” Ford said on Monday.
To cut off U.S. energy, however, Ontario would have to cut its own energy output. The move would likely mean ramping down the province’s hydro-electric output, energy that is also sold to other jurisdictions in Canada.
“We just have to reduce the amount of energy we’re outputting right now, and it wouldn’t be nuclear because if we turn down the nuclear reactor it could take six months but hydro, we could slow that down,” Ford explained on Monday.
According to Ontario’s Independent Electricity System Operator, it relies on its agreements with the United States to “maintain the affordability, reliability and sustainability” of its system.
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The sell-on agreements with the U.S. and other provinces are especially helpful at night and on weekends when demand is low but power plants continue to operate, the IESO website explains.
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Selling it to the United States, Quebec and Manitoba “allows the province to sell surplus electricity that would otherwise be wasted.”
To avoid that power being wasted — and in order not to sell it to the United States — Ontario would have to cut its own output. That could also mean less energy to sell to Quebec and Manitoba, Canadian provinces Ontario also has energy-sharing agreements with.
Ford said on Monday he wouldn’t put a date on when he might cut off energy to the U.S. or what would trigger the action.
The White House has also promised to introduce reciprocal tariffs.
While Ontario sells power to the United States, it also buys some in. One energy expert said that the surcharge could therefore lead to more expensive electricity in Ontario.
“If there was a response, then yes, potentially there could be a response back that would cause electricity responses on imported power,” Tom Timmins, energy law at Gowling WLG, told Global News.
“Maybe we’re importing power on cold January mornings or hot August afternoons, maybe that power would be slightly more expensive.”
The energy minister said the numbers mean the province can afford to take the risk of increasing the price of imported energy. He said Ontario sells the United States 12,000 megawatt hours compared to the 374 it imports from south of the border.
“We are a 31-times net exporter, so we are well-positioned to impose this… we have the ability,” Energy and Electrification Minister Stephen Lecce said.
“The IESO is fully confident in their capacity to keep the lights on for Ontarians and we’re going to keep selling and keep producing the power for Ontario first.”
He stressed the province was “well positioned” to table the levy and even cut off electrical supply and could rely on backups like natural gas to ramp up and ramp down the province’s power generation would leave it protected.
Ontario NDP Leader Marit Stiles suggested the move could come with the long-term risk of losing American states as customers in the future after the trade war is resolved.
“The premier takes a simplistic approach to these things and isn’t considering that the United States might have other places to look for energy and electricity,” she said on Monday.