Washington DC November 14 2024: Monthly average exports from the United States to Canada in 2023 increased 70% on a year-over-year basis to 1,809 gigawatthours (GWh), while monthly average imports from Canada to the United States decreased by 36% to 3,315 GWh.
For the better part of two decades, Canada has exported significantly more electricity to the United States than it imported. However, in the fall of 2023, electricity trade between the two countries became more balanced. The shift was due partly to Canada’s reduced hydropower generation, the country’s primary source of electricity generation, as drought conditions reduced inflow to reservoirs in western Canada. In addition, lower natural gas prices in the United States reduced power prices, making U.S. electricity more competitive.
Monthly average exports from the United States to Canada in 2023 increased 70% on a year-over-year basis to 1,809 gigawatthours (GWh), while monthly average imports from Canada to the United States decreased by 36% to 3,315 GWh. In 2023, the United States remained a net importer of Canada’s power on an annual basis, but the amount of electricity received fell sharply from 42 terawatthours (TWh) in 2022 to 15 TWh in 2023. The decline in imports from Canada was large enough that by September 2023 the United States switched to become a net electricity exporter to Canada, which continued for five of the next nine months, according to EIA’s Quarterly Electricity Imports and Exports Report.
Electricity exchanges across the United States and Canada—historically each other’s largest electricity trading partners—remain relatively small, representing less than 1% of their respective total generation. However, the trade is important to grid balancing—constantly matching electricity consumption to electricity production—and helping to shore up electricity supply during low hydropower production periods particularly on the western coast of Canada.
The value of power sales from Canada to the United States totaled $3.2 billion in 2023, nearly 30% less than in 2022. In contrast, electricity exports from the United States to Canada increased $454.5 million in 2023 to $1.2 billion. Average prices for the export of electricity from Canada to the United States were higher in 2023 despite an overall decline in total value due to the greater share of exports from Canada under contracts. On the other hand, average prices for electricity from the United States to Canada were lower in 2023 compared with 2022 because most sales were under interruptible contracts and were able to take advantage of favorable economics last year.
Cross-border trade in electricity
Power transmission lines linking the United States and Canada are part of a complex and highly interconnected power system, with connections spanning from New England to the Pacific Northwest. Those connections help smooth the delivery of power within three of the four major interconnections in North America, and in turn they help ensure system reliability and access to economical sources of supply.
Most of the electricity delivered to the United States from Canada comes from provincial power corporations and their affiliates. Among the largest players are British Columbia Hydro and Power Authority (BC Hydro), Hydro Quebec, and Ontario’s Hydro One, which all have wholesale trading divisions and subsidiaries in charge of power exchanges with the United States.
Western Interconnection
The Western Interconnection has shown the most variability with respect to levels of trade between the two countries and was largely responsible for the significant shift in 2023 when Canada began importing more electricity from the United States than it exported.
BC Hydro is the main Canadian entity that trades with the United States in the Western Interconnection, sending power to the Bonneville Power Administration (BPA) in the U.S. Northwest. However, since late 2022, net outflows from the United States to BC Hydro increased significantly.
BC Hydro reported a record drought in 2023 and predicted drought conditions to continue throughout 2024. British Columbia’s imports of power through Powerex Corp. in 2023 and the first half of 2024 helped alleviate low hydropower production in the province. Traditionally, the province sends power to California; however, in 2023 California received less power from British Columbia because California’s renewable power capacity increased in 2023 and hydropower generation increased by 80% compared with 2022 when there was a persistent drought in California.
British Columbia’s total electricity exports to the United States, which include exports from BC Hydro, declined by 45% in 2023 from 2022. From 2022 to 2023, exports from British Columbia to California declined 75%.
Eastern Interconnection
The Eastern Interconnection has multiple electricity transfer points between Canada and the United States. These connections involve power exchanges between the midwestern trading partners of SaskPower, Manitoba Hydro, and Ontario Power with the Midcontinent Independent System Operator (MISO) and the Southwest Power Pool (SPP) in the United States. The Canadian entities in the Eastern Interconnection exchange power with ISO New England (ISO-NE) and the New York Independent System Operator (NYISO), which are the U.S. reliability organizations that oversee power trades with the Quebec Interconnection as well.
MISO net inflows from Manitoba Hydro decreased by 39%, from a daily average of 24 GWh in 2022 to 15 GWh in 2023. And in recent months, outflows from MISO to Manitoba Hydro exceeded inflows. MISO net inflows from the Ontario Independent Electricity System Operator (IESO) decreased by 13%, from a daily average of 23 GWh in 2022 to a daily average of 20 GWh in 2023. Net inflows to NYISO from Ontario IESO decreased by 17%, from a daily average of 14 GWh in 2022 to a daily average of 11 GWh in 2023.
Trade between other regions remained mostly unchanged and was relatively smaller. For example, ISO-NE net inflows from New Brunswick remained around 5.5 GWh per day in 2023, which was mostly flat relative to 2022.
Quebec Interconnection
Hydro-Quebec’s cross-border daily average electricity deliveries into NYISO declined by 72% to 7 GWh in 2023. Hydro-Quebec’s cross-border electricity deliveries into ISO-NE decreased by 22% in 2023 to 29 GWh.
Hydropower generation provided 94% of total electricity generation in Quebec in 2021. But persistent drought conditions limited the water supply in the province, leading to 9% less hydropower generation in 2023 compared with 2022.
The largest month-over-month decreases in hydropower generation were in the summer months of July (13% decline) and August (23% decline). During the summer months, electricity demand in the eastern United States peaks, and imports from Canada increase.
