The energy sector is at a crossroads. U.S.-Canada trade tensions threaten electricity imports, grid operators scramble to understand the financial fallout, and PJM’s latest multibillion-dollar transmission expansion reflects the urgent need for infrastructure upgrades. Meanwhile, breakthroughs in nuclear technology and policy shifts signal a changing energy landscape. Today’s GridBrief unpacks the biggest developments and where they’re taking us next.

Ontario Premier Threatens to Cut Off U.S. Power Exports Over Tariffs

Ontario Premier Doug Ford has escalated trade tensions with the U.S., threatening to cut off electricity exports if President Trump’s new 25% tariffs on Canadian goods move forward. Canada supplies a significant share of electricity to New York and New England, making Ford’s retaliation a potential shock to the region’s grid stability.

Canada is the largest electricity exporter to the U.S., providing over 70 terawatt-hours annually, largely through hydroelectric power. The U.S. benefits from this clean, reliable baseload supply, especially in the Northeast, where renewables and nuclear retirements have created energy shortfalls. If Ontario follows through on its threat, U.S. utilities could be forced to replace that supply with higher-cost natural gas, potentially driving up electricity prices and emissions.

Ford’s stance highlights the broader energy security implications of the trade war. While the U.S. and Canada have one of the most integrated grids in the world, energy has now become a bargaining chip in economic disputes. The move also puts pressure on the federal government, as U.S. lawmakers weigh whether the tariffs are worth the potential hit to grid reliability.

New England, New York Grid Operators Scramble to Address Canadian Tariff Fallout

With a 10% tariff on Canadian electricity imports set to take effect, grid operators in New England and New York are warning of financial and regulatory uncertainty. The Federal Energy Regulatory Commission (FERC) is now being asked to clarify whether ISOs (Independent System Operators) must collect and remit the tariffs, a move that could add tens of millions in costs to ratepayers.

New York imports over 7.7 TWh of Canadian electricity annually, making it the largest recipient of Canadian power in the U.S. A tariff on those imports could raise electricity costs significantly, with estimates suggesting New England customers alone could see an annual price increase of up to $165 million.

Complicating matters further, grid operators argue that electricity—an intangible commodity—shouldn’t be subject to tariffs like physical goods. If FERC determines otherwise, ISOs could be forced into the unprecedented position of acting as tax collectors for the federal government.

The bigger question remains: will the tariffs hold? U.S. industry groups and consumer advocates are already lobbying for exemptions, and a prolonged fight could lead to policy reversals. Until then, expect legal and political battles to shape the future of cross-border electricity trade.

PJM Approves $6.7 Billion Transmission Expansion

PJM Interconnection has greenlit a massive $6.7 billion transmission upgrade to address growing reliability concerns, reflecting the scale of America’s grid challenges. The plan includes a $4.6 billion, 765-kV transmission backbone spanning multiple states, aimed at reinforcing west-east power flows.

This expansion is part of a broader effort to accommodate shifting energy demand, driven by AI-powered data centers, electric vehicle growth, and the retirement of aging baseload plants. However, the soaring costs underscore the infrastructure bottlenecks facing the energy sector. Permitting delays, supply chain issues, and rising equipment costs have nearly doubled transmission project expenses since 2021.

The approval signals PJM’s urgency in shoring up the grid ahead of anticipated capacity shortfalls. Yet, questions remain about execution: how quickly can these projects be built, and will regulatory hurdles slow their deployment? Given the growing strain on the grid, this transmission investment is only the beginning of a larger modernization push.

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Conversation Starters

• The Independent - Battery Breakthrough as Scientists Turn Atomic Waste into Electricity
  Researchers at Ohio State University have developed a nuclear battery that converts gamma radiation into power, potentially providing a decades-long energy source for deep space missions and remote sensors.
  

• AXIOS - Exclusive: Penn State Bets on Tiny Nuclear Tech
  Penn State is launching a research facility featuring Westinghouse’s eVinci microreactor, signaling growing interest in small-scale nuclear power for data centers, remote communities, and even lunar bases.
  

• Financial Times - Is Giving Old Reactors New Life the Future of Nuclear Energy?
  With nuclear construction costs skyrocketing, energy experts argue that extending the lifespan of existing reactors is the most cost-effective way to secure baseload power for the grid.

Good Bet, Bad Bet

Good Bet: Eaton Corporation (ETN)
With a growing transformer crisis and a $6.7 billion transmission expansion approved in PJM, Eaton—a leader in electrical grid equipment—is positioned to benefit from skyrocketing demand for transformers, switchgear, and grid modernization hardware.

Bad Bet: GE and the Internet of Energy
A decade ago, GE confidently claimed that its "Industrial Internet of Things" would revolutionize energy markets, allowing for seamless predictive maintenance and efficiency gains. Instead, the company’s energy division collapsed under the weight of bad bets on gas turbines and software that never quite delivered. The lesson? Big promises in energy tech don’t always translate to financial success.

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