The transfer of electrical energy at high latitudes between the magnetosphere and ionosphere-thermosphere (IT) system is contained within the resulting currents and electric fields between the two systems. As such, the electrodynamic state of the IT system can influence how much of the electrical energy is transferred at any one time by modulating the currents that flow in the region. For this study, 1557 hours of detailed E region measurements by the Sondrestrom incoherent-scatter radar from 1993 through 1998 were collected, of which 95 hours were used to determine the local electromagnetic energy transfer rates within the IT system and evaluate the role of the IT system in modifying this energy transfer. The measurements have been organized into 59 periods of enhanced electrical energy transfer and cover all universal times but are local to the region above Sondrestrom at 74.2¿ magnetic latitude. In many of the events studied it was found that the IT system acted to reduce the net electromagnetic energy transferred from the magnetosphere owing to the presence of neutral winds. The dawn sector proved to have on average greater passive energy deposition rates than in the dusk sector. The reduction of this rate by neutral winds also proved stronger in the dawn sector. This enhanced modulation caused the dawn-dusk asymmetry in energy transfer to be less pronounced but still apparent in the electromagnetic energy transfer rate. ¿ 2000 American Geophysical Union