Information re: Tariffs on Energy Imports from Canada

UPDATE March 7:

We continue to investigate the potential impacts to the cost of electricity of the executive order on tariffs, as well as reports of possible reverse tariffs or embargoes from Canada, neither of which are in place today from Quebec. We expect this to be an evolving situation.

UPDATE: March 4, 2025

You’ve probably seen in the news that the United States has levied tariffs on Canadian imports, including energy sources. Historically, electricity has not been subject to tariffs so we are in uncharted waters.

There are a lot of details that we do not yet know from the federal government and these details matter in determining cost impact. For example, the Canadian Import Tariff Executive Order addresses "energy and energy resources" but the referenced underlying definition does not explicitly identify electricity as a component of the 10% tariff.

We are watching closely for federal guidance to determine how these tariffs will be applied, at which time we will be able to estimate any financial impacts. We continue to work on mitigation strategies to reduce the financial impact on our members while ensuring we maintain reliable power.

Canada and Hydro-Quebec are important partners and neighbors. Keeping good local ties and a strong working relationship with them is important, even as we navigate tariffs.

At VEC our top priority is providing our 34,000 members with safe, reliable, sustainable and affordable energy. While recent headlines may cause alarm, we are committed to doing our best to mitigate rate impacts and sharing updates as this situation develops.

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February 11, 2025

The situation regarding potential tariffs on energy imports from Canada continues to evolve. VEC has been diligently evaluating the developing situation and coordinating with our Vermont and regional energy partners and regulators.

We want to emphasize that if tariffs are ultimately imposed, we are not concerned about the continued reliability of service. Power will continue to flow onto our system and VEC will continue to supply members with the energy they depend on us for.

We are, however, concerned about the financial consequences if tariffs are ultimately imposed. About 42 percent of VEC’s 2024 power supply was procured from Hydro-Quebec (HQ). If the cost of this power supply were to increase by 10 percent it would cost VEC members in the range of $2 million this year, which would equate to just over a 2 percent increase over current rates.

VEC will continue to work to obtain accurate and timely information regarding potential tariffs. While we are relieved to see the postponement of the proposed tariffs, we will continue to prepare in case tariffs are implemented in the future. We are committed to doing everything possible to mitigate any financial impacts.

We will communicate any significant updates as they become available. We appreciate your interest, your inquiries, and your understanding as this situation continues to sort out. Thank you.