Hartford Business Journal

22 HARTFORDBUSINESS.COM | DECEMBER 1, 2025 FOCUS | ALTERNATIVE ENERGY BUILD A NEXT-GENERATION DATA CENTER THAT REUSES RESOURCES, GENERATES POWER AND SUPPORTS RESPONSIBLE COMMUNITY DEVELOPMENT. ReNew Developers merges real estate and energy expertise to deliver sustainable power infrastructure for Connecticut's growth industries. Learn more by visiting renewdevelopers.com Where Clean, Sustainable Energy Meets the Demand for Data and Power 103 S. Main Street #734 Colchester, CT 06415 State official: CT's high energy prices pose 'existential threat' to businesses; calls for regional policy coordination By Andrew Larson alarson@hartfordbusiness.com C onnecticut's energy prices — 140% higher than the U.S. average — threaten the state's economic competitiveness as neigh- boring states add gigawatts of new electricity demand while Connecticut lags with minimal load growth, state officials and industry executives said at an energy policy forum hosted by the Hartford Business Journal on Nov. 13. Daniel O'Keefe, commissioner of the Department of Economic and Commu- nity Development, said the state's high energy costs pose an "existential threat" to its manufacturing-heavy economy, which represents 12% of Connecticut's economic output — the highest share in the region. "I can sell a lot of things about Connecticut. I can't sell a megawatt that's more expensive than anywhere else," O'Keefe said. "That is a greater problem for Connecticut than it is for the region." High energy prices may be suppressing economic growth in Connecticut, particularly as data centers, artificial intelligence applica- tions and advanced manufacturing drive explosive electricity demand nationwide, officials said. To help lower costs, O'Keefe proposed that Connecticut and other New England states move away from individual state-level power purchase agreements toward coordinated regional energy procurement through the ISO-New England grid system. He compared the current approach to a "prisoner's dilemma," where states acting independently fail to optimize outcomes for the broader system. "Decisions we make about procure- ment of energy should be done on a regional basis," O'Keefe said. "We are part of a regional grid. We've got to recognize that dynamic." However, not all cost pressures originate with procurement decisions. Anne C. George, vice president and chief of external communications at regional grid operator ISO-New England, noted that even if expanded natural gas capacity lowers whole- sale supply costs, consumers' retail bills are shaped by four components: distribution rates, transmission costs, wholesale energy supply and public-policy charges. DECD Commissioner Daniel O'Keefe, next to Anne C. George of regional grid operator ISO-New England, speaks at HBJ's recent energy event. Photo | Luke Wayne Photography "We have to think about all of those pieces and try to make sure that we're doing each bucket in the most cost-ef- fective way," George said. O'Keefe acknowledged Connecticut's structural challenges, including lack of local energy resources and limited natural gas infrastructure. But he said policy decisions made over the past two decades — aimed at meeting emissions reduction goals for 2040 and 2050 — have constrained natural gas development while the state invested in renewable energy. That has contributed to higher energy costs in the state. Connecticut aims to reach a 100% zero-carbon electric sector by 2040. State law also requires an 80% reduction in economy-wide greenhouse gas emissions from 2001 levels by 2050. Natural gas currently provides roughly 45% to 50% of electricity generation in the region, according to George. For the long term, O'Keefe advocated for planning 10 to 15 years ahead to incorporate nuclear power, including small modular reactors expected to come online within a decade, and nuclear fusion technology, which could be viable in 15 to 20 years. With manufacturing expanding in Connecticut but shrinking elsewhere in the region, the state's economy remains especially sensitive to energy price impacts, O'Keefe said. He warned that without addressing the pricing challenge, the state faces significant economic consequences. "If we can't fix this over the next number of years, I think our economy is in trouble," he said.

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