O’Keefe: Energy Costs an ‘Existential Threat’
Connecticut Department of Economic and Community Development commissioner Dan O’Keefe doesn’t mince words when it comes to the state’s high energy costs.
“I think the greatest existential threat to our continuing economic progress is our high energy prices,” O’Keefe told the 200 attendees at CBIA’s 2025 Energy & Environment Conference.
State lawmakers approved legislation promising modest relief to electric ratepayers earlier this month.
Gov. Ned Lamont described that measure as “one step in the effort to make energy rates more affordable and we should not stop here.”
O’Keefe spoke with Hydro-Québec’s Kyle Collins about the intersection of the state’s energy supply and costs and economic growth.
“I’ll give a very scientific answer to our needs, which is more—more from every source we can get,” he said.
‘Silver Bullet’
Connecticut has the third highest residential electric rates in the country—75% higher than the national average.
O’Keefe described expanded natural gas supply as an important source for addressing the state’s immediate needs.
“There is a silver bullet—it’s more natural gas,” he said.
“I know that is unpopular in many quarters, and I say it again as an environmentalist, that is the silver bullet.”
O’Keefe acknowledged that some communities “get up in arms” about gas pipelines.
But he said what he’s talking about is expanding capacity in existing pipelines.
He noted there are challenges to expanding that capacity, including working with New York to get more gas infrastructure on the grid in the Northeast.
“If you want to really move the needle, I think that is the silver bullet, but it’s incredibly politically non-palatable for all kinds of reasons that I appreciate,” he said.
Good News, Bad News
O’Keefe said Connecticut’s economic progress has accelerated over the past three years.
He noted that Connecticut was the 17th fastest growing state in the nation and is the only state in the region to have population growth in each of the last four years.
O’Keefe noted Connecticut’s relative energy costs are well over twice the rest of the country.
An important part of that growth is the state’s manufacturing industry.
O’Keefe said Connecticut has reprioritized the onshoring and reshoring of the supply chains in support of the defense industry.
“That’s the good news,” he said. “The bad news is that’s a high energy sector.”
Economic Competitiveness
O’Keefe said that when he talks to companies considering moving to Connecticut or whether to stay in the state, the first thing that comes up is energy costs.
“I can sell quality of life,” he said.
“We have a high-cost labor force, but they’re incredibly, really strong. So I can sell a product that’s high quality and high value.
“We need to be pursuing all of these avenues, increasing as much supply as we possibly can.”
O’Keefe
“What I can’t sell is a megawatt that’s over two-x as expensive as the rest.”
O’Keefe explained that energy demand will only increase, and the only way to lower costs is to increase supply.
“I just think we need to be pursuing all of these avenues, increasing as much supply as we possibly can while we continue to work on things like efficiency, while we continue to electrify the grid, but by keeping an eye on relative price, because that’s what defines our economic competitiveness,” he said.
Energy Supply
He noted the state’s energy supply is about 55% natural gas, 24% nuclear, 12% renewables, and 8% hydro.
O’Keefe emphasized that nuclear power is an important piece of the state’s long-term energy future.
That includes efforts to create new small modular reactors that can help power sectors like data centers.
“I’m an environmentalist, but I’m also an economist, and I’m a realist.”
O’Keefe
But he stressed that in the short term, increasing the natural gas pipeline capacity is the most realistic way to lower costs.
“I’m an environmentalist, but I’m also an economist, and I’m a realist,” he said.
O’Keefe said it’s critical that the state balances supply, clean energy goals, and affordability—especially relative pricing.
Path Forward
He noted that decisions made by policymakers over the last 20 years in the move toward more carbon-free and renewable energy have contributed to high costs.
O’Keefe said those goals are laudable and Connecticut needs to “aggressively invest in a renewable future.”
He added there is logic to relatively higher energy costs because it’s renewable, but right now, they’re 160% higher.
“We allowed our relative energy prices to start to get to a place where we’re less economically competitive,” O’Keefe said.
“We allowed our relative energy prices to start to get to a place where we’re less economically competitive.”
O’Keefe
He warned that staying on that path will “grind our economy to a halt.”
“The timelines need to be rational, and that’s the mistake I think we made,” he said.
“We want to reach this carbon-free future and have a clean energy economy.
“I think the only way you do that is by having an affordable, reliable path forward.”
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