Electricity imports from Canada to the northeastern United States are facing a significant downturn, presenting both challenges and opportunities for small business owners in the region. As the New York Independent System Operator (NYISO) and the Independent System Operator of New England (ISO-NE) report diminishing hydropower imports, businesses relying on stable electricity access must navigate this evolving energy landscape.
Recent data reveals that from January to August 2025, daily net electricity imports from Canada into ISO-NE were less than 40% of what they were during the same period in 2022. The situation is even more pronounced in NYISO, where net trade has sunk to just 25% of the previous year’s figures. These declines mark a continuation of a concerning trend identified in 2024, driven by two primary factors: worsening drought conditions in Canada resulting in diminished hydropower production and reduced electricity demand in both ISO-NE and NYISO.
Drought has significantly affected Canadian hydropower generation, vital for both the Canadian economy and the northeastern U.S. power supply. Despite some areas experiencing above-average rainfall in July, persistent drought conditions have jeopardized electricity generation across much of Canada. This situation is compounded by electricity demand decreases in the U.S. Northeast, with ISO-NE usage falling by 9% and NYISO demand down 6% from 2016 to 2024.
For small business owners, these changes mean reevaluating energy strategies. When demand surges—particularly in winter—Canadian electricity has historically played a crucial part in meeting that need. For instance, in January 2025, Canada supplied an average of 14% of ISO-NE’s electricity demand. However, with current imports averaging only 5%, businesses may need to seek alternative energy sources or invest in energy efficiency measures.
Monitoring reports indicate a surprising shift: NYISO and ISO-NE are exporting electricity to Canada, particularly in shoulder seasons when demand is lower. In February 2023, ISO-NE first recorded more daily exports than imports from Canada, a trend that has accelerated with net exports occurring 49 times in 2024 and 20 times through August 2025. Similarly, NYISO has frequently found itself in a position to export, marking its first daily net exports in July 2023.
These shifts highlight critical considerations for small business owners:
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Energy Management: With the changing dynamics of imports and exports, businesses must assess their energy consumption patterns and integrate more flexible energy solutions. Whether through renewable energy installations, energy storage solutions, or partnerships with local providers, adapting to potential fluctuations is crucial for maintaining operations during peak demand periods.
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Potential Cost Implications: The reduced reliance on Canadian imports, coupled with inconsistent supply, may lead to increased electricity costs. Small business owners should explore fixed-rate electricity contracts or self-generation options to mitigate risks associated with potential price volatility.
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Investment in Energy Efficiency: As demand becomes more variable, investing in energy-efficient technologies and practices can create a buffer against fluctuations. Businesses may achieve significant savings long-term while bolstering their resilience in future energy markets.
- Leveraging Local Resources: Engaging with local energy providers for innovative solutions can enhance stability. This might include exploring community solar options or participating in demand response programs that offer incentives for reducing electricity use during peak periods.
In tapping into these insights, small business owners can better navigate the evolving electricity landscape, maintaining operations and fostering growth, even in the face of external challenges.
For a deeper understanding of the energy trends affecting the region, view the full analysis from the U.S. Energy Information Administration here.
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