ICYMI: New York Sports Legend Goes From Ice to Geothermal

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1:58Bloomberg Audio Studios, podcasts, radio, news. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. Brightcore Energy is digging deep for geothermal heating and cooling, not just geothermal, though. They're also working on energy efficient lighting, solar energy, really everything to help big buildings use less energy. Mike Richter joins us. He's president of Brightcore Energy, also former three-time NHL All-Star goalie, a 1994 Stanley Cup champion with the New York Rangers. He joins us from Armonk, New York. Also with us in the Bloomberg Interactive Brokers studio, Will Wade.

2:38He's energy reporter for Bloomberg News. Did you play in the NHL? I did not. I can't skate at all. Okay, I can't either. I just wanted to make sure before we move forward. Full disclosure, Mike Richter's brother, Joe Richter, works here at Bloomberg for Bloomberg's research arm, Bloomberg Intelligence. Good to have you both with us. Mike, I just want to start with you for people who know you from your career in the NHL. What was your transition like going from playing hockey professionally to working in sustainability with a little stop at Yale between that? Well, well, first, thanks for having me on.

3:13Great. it was it's it's an adjustment I think I ended my career about 38 years old back in 2024 and you're a little rudderless you've been giving your time energy focus to being as good as you can be in one very specific area and it is a bit of an artificial world and and I loved every second of it and I had a you know it was a great gift to be able to play in the league and in the you know New York area in particular is really a special place. But I had a young family at the time and I was injured and there was a decision to make. You know, do you stay within the confines of that same, I guess, focus?

3:56And I've always had an interest in the environmental world and energy in particular. And that intersection between finance and energy is a massive one. It's only grown in the last two decades. So the stop at Yale was excellent. and it helped me kind of position myself and have a segue from one world to another. And this is just a great opportunity and a really worthwhile pursuit. So, Mike, tell us about your transition to developing sustainable buildings. I'm particularly interested in the geothermal. I've seen some projects do that. It's unique. It's not something we're seeing a whole lot of yet, but I think we might be seeing more of it.

4:38Yeah, great question. I guess two things. The energy efficiency is kind of always in vogue, right? If you're using less resources, you're going to be paying less. And so ultimately, our value proposition is selling savings to commercial industrial buildings. And there is no better way of heating and cooling a building than ground source heat pump. And I just want to make a distinction there. Geothermal, as we see a lot of, Google's doing some work out there. Some really great companies are working on the hot rock geothermal out west, very deep in the ground, using steam to turn turbines, as you would with a coal power plant or even a nuclear power plant, and literally creating electrons.

5:20We don't do that. We are simply transferring heat. It's the idea of a cold beer in your hand on a warm summer day. There's really a therm transfer, a heat transfer from that warm hand to the cold beer. The beer heats up, your hand cools down. We use the thermal mass of the earth to do that. And it sounds complicated, but it's just physics. And really, the general temperature of the earth doesn't waver a lot once you go about four feet down below the frost line. The ambient temperature is about 55 degrees. And we take advantage of that. you have heat pumps just like you would in your air conditioning unit or more particularly in your freezer and refrigerator and instead of blowing that hot air down on the ground and keeping the cool air in the box we just put it through a closed loop system into the ground that heat transfer takes place and you're lifting the air from 55 degrees in the winter time to maybe 70 to be warm inside and in the summertime it's it's almost free air conditioning so we always say the coefficients of performance are as good as you're going to get right now.

6:26And honestly, we try to be agnostic on what we're offering. And if there was a better method of heating, cooling, and building, we'd be on it. But this has been going on in New York for about two decades. And I'm speaking to you in Armonk, New York. We have an office in Brooklyn, but also one in Stockholm, Sweden, where they have been leading the charge with a lot of the design and the execution. So we're thrilled by this. And as you know, energy costs are going up and demand is skyrocketing. So good time to be in this place. The geothermal involves digging a lot of holes in the ground. Is this something you can add to an existing building or does it have to be when you build the building new?

7:01Yeah. And that is a great question. That is the choke point where it gets quite complicated. You know, 80 % of the building stock in a city like New York, for example, is going to be here in 20 years. So we've done new builds and we love it. It's virgin territory, you come in, you get the wells stuck in the ground, you cap them, and you connect it to the mechanical system inside, build a building around it, and you're done. How do you go into a building that's existing and then do that same routine? Very, very difficult. You're space-constrained, and you're even sometimes technologically constrained with what's already in the building.

7:34So that's been the technological transformation that we've been able to pull across the Atlantic from Europe, just like the oil and gas industry has had such great innovation. We are really starting to ride on the coattails to that innovation. And we are able to go now. The addressable market has blown up in terms of its scale. When you can start doing the space constraint places like an urban setting, New York City is a great example. And the retrofit market, we literally have smaller rigs now that can get into these tight spaces, nine and a half feet of clearance and be able to go 500 feet down through the substructure of the building into Manhattan Schist.

8:15the bedrock and it's very stable seismically. The thermal conductivity is phenomenal. It's a really amazing thing that you can do and it actually enhances the strength of the building. It doesn't weaken it at all, but you get a transformation in terms of not only your greenhouse gases, but really, as I said, we're selling savings, what you're paying operationally month to month to the energy companies. So you could put solar on the roof and geothermal in the basement and make savings at both ends of the building? You really can, actually. And these heat pumps are moved by the power that they use is electricity, and they're very, very efficient.

8:56But I think in a place like New York, there's limited opportunities. We can change every light bulb, but probably not putting solar because you think of a post-it stamp roof, this massive building below 50-story building, for example, you're just not going to get much power from that small solar array. What do you do? And we've been able to actually do retrofits in Manhattan, right in the heart of Manhattan. And it profoundly changes the trajectory of that building's ability to afford payments on the energy and just see an ROI that's really substantial. We're speaking with Mike Richter, president of BrightCore Energy, also former three-time NHL All-Star goalie, 1994 Stanley Cup champion with the New York Rangers.

9:37Also with us in the Bloomberg Interactive Brokers Studio, Will Wade, energy reporter for Bloomberg News. Mike, talk a little bit about the regulatory environment. There's been a lot of, you know, headlines when it comes to tax incentives for green energy. Is that area helping or hurting your business right now? There's no question. We're a young industry in North America anyway. And so the incumbents have an advantage. They have scale. And that's why you have these incentive structures. The Trump administration recognized the efficiency that's brought by geothermal. And this reconciliation bill, we came out really well.

10:18These massive federal tax treatments are transferable. So not-for-profits can use them. Higher ed, houses of worship. Again, we're in the commercial industrial space and it's really meaningful. You can actually start to save up to 40. And if it's an economic development zone, 50 % of the capex of the front end costs. And it's already established that the operational costs are there. The problem was you could never get to them because it's so expensive up front. All those holes in the ground, that's a meaningful expense that you wouldn't have, say, with air source heat pumps. What's great about this is the ground source heat pumps are two times as efficient as air source.

10:58So four times efficient is often what we're replacing. so there's really meaningful savings if you just unlock that capex up front now you can have third party finance of course but the big thing is we've maintained those incentives and they're really significant and that's at the federal level these things are stackable so you have federal incentives you have individual states have better or worse and even different utility zones and utilities understand the squeeze that they're in because there's so much demand coming with AI and data centers. So what do you do with that? You look toward efficiency.

11:33And if I can make, say, the Empire State Building more efficient than it once was, and it's using 40 % less electrons, that's a meaningful diminishment for Con Ed, in this case, and Con Ed territory. So they've been incredibly creative and supportive. So we're in a very, very good spot with that. The upfront costs, though, with this technology are pretty high when you think about the CapEx involved. How do you make the numbers work and sort of, especially compared in places where energy isn't that expensive? Well, thankfully, this is where my goaltending background helps. I leave it to the finance department, and they've been incredible.

12:08Look, you can't lie with these numbers. So you just pass the problem. You pass the problem, right? But the physics have to work. And so we do a no-go-go evaluation right up front, understanding what the thermal load of the building is and how many boreholes we can get in there and how much it's going to cost per linear foot And all those things come into play. Excuse me. But in the end, with these incentives, net of the stackable incentives, it can often be less than what the incumbent was going to be to replace anyway. So we stack up very well against air source heat pumps and natural gas peakers and whatnot.

12:47And it's case by case. You have to do that evaluation. And truly, we don't expect people to say, hey, I want to pay extra for being green or sustainable. No one knows what that is. They do understand I'm saving operationally and there's a return on investment. And these things are really robust, right? They're not just flood proof and fire resistant because they're literally underground and capped. but they have a life expectancy of 75 to 100 years. So I sound like a used car salesman sometimes when you give that pitch, but there's a lot that lends itself to really suggesting these things should be the kind of the shape of where buildings are going in the next five to 10 years.

13:23Mike, I'm going to have to leave it there, but thanks so much for joining us this afternoon. We love talking about solutions to the energy challenges that our world is facing right now. Mike Richter, president of Brightcore Energy, also former three-time NHL All-Star goalie, a champion of the Stanley Cup 1994 with the New York Rangers. Also, a big thank you to Will Wade jumping in, Bloomberg News Energy reporter. Check out Will's reporting on the Bloomberg Terminal and at Bloomberg.com. When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges.

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15:27Be smart. Get wise. T's and C's apply. Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it. That's the kind of stuff Optum is changing. They're using data and technology to integrate patient care, pharmacy, and everything else. So healthcare is connected, not complicated. What's that look like? Cheaper prescriptions that are easier to get and care that looks at the whole person how you need it. Optum is helping make health care work as one for everyone. Learn more at business.optum.com.