Why Alberta and Montana Are Locked in a Dispute Over Electricity Trade

A growing trade dispute between Alberta and the U.S. state of Montana has drawn attention ahead of the mandatory review of the Canada-U.S.-Mexico Agreement (CUSMA). U.S. officials argue that Alberta’s electricity rules unfairly limit Montana’s ability to sell power north of the border.

At the centre of the disagreement is the Alberta Electricity System Operator (AESO), which oversees the province’s power grid. Montana lawmakers and electricity producers claim Alberta’s grid rules sometimes block U.S. electricity from entering Alberta, discouraging investment in cross-border transmission lines and hurting Montana power suppliers.

The U.S. Trade Representative has flagged Alberta’s electricity system as a trade concern, while Montana Senator Steve Daines and state legislators argue the rules undermine both fair competition and grid stability in Montana.

Alberta’s government strongly rejects the accusations. Utilities Minister Nathan Neudorf says Montana is treated no differently than other neighbouring jurisdictions, stressing that grid decisions are based on reliability and system safety, not discrimination.

Experts note that Alberta functions as an “energy island,” with limited transmission connections to other regions. As Alberta rapidly expanded renewable generation and fully phased out coal in 2024, it shifted from being a net electricity importer to a net exporter — changing long-standing cross-border dynamics.

Montana officials argue the uncertainty is preventing new infrastructure investment and want clearer, long-term rules. Alberta maintains that expanding transmission capacity is possible but must align with grid reliability standards.

With CUSMA negotiations approaching, the dispute has taken on broader trade significance, adding tension to already sensitive Canada-U.S. economic talks.