PG&E, TID costs could increase from Trump tariffs | Here’s how much

SACRAMENTO, Calif. — There’s a lot of back-and-forth with tariffs and surcharges for imported electricity and natural gas from Canada. With that back-and-forth, it’s hard to gauge what the exact impact could be, but there are impacts to some scale.

President Donald Trump’s tariffs on Canada have stirred a lot of conversation and a lot of questions, especially after the provincial government of Ontario called for surcharges on electricity sold to the United States. Those surcharges were suspended as the president threatened to double his planned tariffs.

While some Northern California utilities get electricity from Canada, none of the ones ABC10 spoke with are getting electricity from Ontario providers, which would have had the surcharge. That being said, some utilities do get electricity from Canada and notably, natural gas, which carries a 10% tariff. 

California Independent System Operation (CA ISO) said most of Canada’s energy goes to the Midwest and northeast, with natural gas going to the Pacific Northwest.

But for the ones affected, customers aren’t expected to see significant impacts. PG&E expects an average annual increase of $0.16 on a residential monthly bill, even with a 10% import tax. 

Here’s where some of the utilities in Northern California stand when it comes to getting energy and natural gas from Canada.

PG&E Spokesperson Paul Moreno: 

PG&E will continue to import natural gas from Canada to serve our residential and small business (core) customers because it is the cheapest source of gas in our portfolio. The gas supply (commodity) makes up a smaller share of our residential customers’ monthly gas rate and bill, about 10% on the typical bill. Gas supply makes up an even smaller portion in the non-winter months. Even with a 10% import tax, we expect the annual average residential monthly bill to increase by about $0.16.   

MID Spokesperson Melissa Williams: 

We do occasionally trade with Powerex, which is the marketing arm of BC Hydro, a large utility and hydro power operator in British Columbia. We currently have a short-term contract with Powerex that runs through 2027. To our knowledge, British Columbia has not announced surcharges similar to the Ontario surcharge. The Powerex contract is currently a small fraction our overall power portfolio. MID relies on a diverse, balanced power resource mix to meet our customers’ needs. We generate some electricity at our own power plants; others are owned in partnership with other public utilities. We also buy power from others in the energy marketplace. This diverse mix provides the best insurance for our customers against all kinds of risks – marketplace, legislative, regulatory, technological, weather and climate. I hope these details are helpful to your piece.

TID Spokesperson Constance Anderson:

TID has gas pipeline rights to import natural gas from Canada. While the recent tariffs did not have a significant impact on TID energy procurement, they could prove to have impacts in the future. As TID works to secure contracts for future energy resources, not knowing what tariffs will be in place, what the rate will be and for how long the tariff will be imposed, will likely increase costs.

If Canada decides to impose retaliatory measures or potentially limit the amount of exports of gas or power they are willing to send to the US, it would create another set of challenges – not just for TID, but for the western United States.

Where we are most likely to see power supply impacts from retaliatory measures will be during the summer, when TID is reaching some of our largest daily energy loads of the year. Not having the ability to procure dispatchable, carbon-free hydropower, which is plentiful in western Canada, means higher prices for electricity and less capacity to meet peak loads. A significant portion of gas used in California and used to run TID’s local combustion turbine power plants originates in Canada.  If there are further tariffs or limitations on gas imports into the US, we would expect costs for natural gas to increase.

There are a multitude of factors that go into determining the total cost to the District to provide power, and thus the rates we charge our customers. TID’s energy procurement in the near-term is largely hedged, which will help buffer any immediate impact to customer rates. However, the long-term outlook is more uncertain as tariffs continue to be implemented and rescinded and countries determine how they will respond. This uncertainty exposes TID to more movement in the energy markets and potentially larger financial impacts over the next four years and beyond.

SMUD Spokesperson Gamaliel Ortiz: 

We’re seeing some of the impacts to the north/ east coast, not SMUD. 

The CAISO continues to assess how, if at all, trade tariffs may apply to the CAISO market participants or affect CAISO markets.  Market participants, under existing rules, already have the means to incorporate costs that impact their production of electricity into their market bids.

WATCH ALSO | Trump Tariffs Latest: Impacts on steel and aluminum imports