Jay Bellows / KORE Power

Jay Bellows, president of KORE Power, discusses his journey from Johnson State to telecom services in Boston to battery storage solutions in Vermont. First, he reflects on how his passion for Vermont’s outdoors and frustration with city life drew him back to the state. Jay then explains the importance of energy storage for grid reliability, especially as the world transitions toward renewable energy and electric vehicles. He also touches on the partnership with Green Mountain Power and the company’s future plans, including a gigafactory in Arizona. Jay’s journey will encourage you to #starthere in beautiful Vermont.

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TRANSCRIPTION

Jay Bellows
I spend a lot of time in Washington, DC. We have government people there who know everybody. When I show up, I’m going from office to office to office to office. And we’re meeting with both sides. And what’s great about it is we’re being supported from both sides. That’s really rare, especially as we come into a year where there’s an election coming. To know that really it feels like the whole government is behind you is really nice.

Sam Roach Gerber
From Vermont Center for Emerging Technologies, it’s Start Here, a podcast sharing the stories of active, aspiring, and accidental entrepreneurs. Today we are charged up to catch up with energy entrepreneur, Jay Bellows, who serves as president of battery storage systems leader, KORE Power, in beautiful Waterbury, Vermont. Welcome! This is Sam Roach Gerber

David Bradbury
and Dave Bradbury

SRG
recording from the Consolidated Communications Technology Hub in downtown Burlington, Vermont. Hello, Jay.

JB
How are you?

SRG
It’s been a few years since I’ve seen you.

JB
Have I aged a ton?

SRG
Not at all, no, if anything, the opposite.

JB
Oh, you’re wonderful. I need to be around here more often.

DB
He’s been busy. He’s been busy. Welcome back to VCET, Jay.

JB
Thank you

SRG
I’m used to pumping Dave up, you know?

JB
Got it, got it. It’s a full time job.

SRG
Yeah, it is.

DB
Botox is our sponsor. So, you know, it’s all about the looks for our podcast.

JB
Perfect

DB
How can that be?

SRG
Jay, I’d love to talk to you just about your background. Where did you grow up? What was your first job? What were your sort of aspirations as a young kid?

JB
Yeah, I grew up in Western Massachusetts, in a town called Greenfield.

DB
Stop it.

Sam
Dude, I’m from Leverett.

JB
No way.

SRG
Are you kidding me?

DB
Invasion of Pioneer Valley.

SRG
Are you… for life, baby!

JB
Which has changed a lot. I just went through there the other day, but that’s the topic for another day. And I went to college, went to University of Massachusetts, and then transferred, actually was there for many reasons, and transferred to Northern Vermont University and graduated there, which is where I really got my my first feel for Vermont. I went there actually for for basketball, not even thinking about what Vermont had to offer. But when I was there, I really fell in love with the state.

DB
You might be the only person who’s ever left UMass for Northern Vermont University to play basketball.

JB
Not the same level of classes, as far as the what was allowed. Certainly, the education was wonderful. But I really fell in love with Vermont. I left and did after school things, and continued with basketball and did some other stuff, and then moved back to Boston and got involved in technology when I was in Boston. And worked for a network infrastructure systems integration company, led a whole group there. And really fell in love with technology then. And it was during Y2K, so everybody thought their computers were gonna blow up, right? It was the change of the calendar day. And so the business was pretty wonderful. And then after that, we merged the company together, two public entities coming together, and then I took over a communications company, telecom company, and that brought me, actually, back to Vermont. And I really loved that.

SRG
Was that part of the goal in taking that job?

JB
Is coming back to Vermont?

SRG
Yeah

JB
I came back to Vermont actually just before, to be honest with you. I was in Boston and was leaving the city all the time and coming to Vermont all the time.

DB
Doing that drive and be like, why am I doing this?

JB
In Boston, I felt trapped, right? You parked your car. I lived on Beacon Hill. Every other Tuesday, my car was gone. And the first week you come out and you’re panicked, oh my gosh, my car’s gone. Well, you know it’s got stolen. You call the police. They’re like, yeah, ‘It’s Tuesday.’ Dude sweeping the streets. Yeah, exactly. And I would be like, you know, the sign says between seven and nine, it’s 5:30am like, why is my car gone. Oh, sorry, right? So you go 350 bucks, get out of the impound lot. You know, you just, there’s all these things. And so every weekend, I would leave, and my family has a house on Cape Cod. So I’d either go to the Cape or I’d go to Vermont. I like to fly fish and do stuff outside. In the winter, I ski and snowboard. And so I found myself coming up here a lot. And during the transition, when we brought the two companies together, I had my little exit and took that and came here and bought a house and lots of toys and lived a pretty great life.

DB
Living the dream.

JB
Doing some consulting, and then went to work for the telecom company. And we really grew that quite a bit over a 10 year period. I got married during that timeframe. We had kids. My wife’s a physician, she had no scheduled leniency. And so I ended up staying with a telecom company longer, because during that time frame, we actually sold the company twice, but I stayed on because I could completely control my schedule with two kids, which was really nice, and then I met David, is how that went. And David was invested. If I speak incorrectly, please jump in.

DB
I was going to ask you how you got involved with KORE Power and the predecessor, Northern Reliability.

JB
Naturally rolling into this. So I had met David, who told me about a company in the valley, which was NRI, Northern Reliability. He thought that there was some great technology and opportunity. But essentially, I was there for, I think I did two months, two months as a consultant.

DB
I mean, you came in, it’s really cool, because you were like, ‘All right, I want to do something different, but let me just kick the tires a bit.’ And you provide a lot of free mentoring and advice to what was really a volatile, uncertain situation. It was a classic pony in the mud… there’s something there, how do we get that going? And then we were fortunate to bring in as as CEO there. And Lord knows, I forget how many years ago this journey’s been on, maybe ten.

JB
2011 or 12, something like that, it has been a long time.

DB
Yeah, it’s been a bit

JB
It was before grid tied storage. So that was the kicker, right? I mean, that was the that was the thing is, kind of seeing where storage could go. For me, anyway, my father was the was in charge of operations for Eversource, which at the time was Northeast Utilities, and Northeast Utilities, which is the majority of New England, had pump storage. So they would pump water up to these reservoirs and then discharge it, which was really one of the earliest kind of forms of energy storage – grid tied, anyway – so they could generate electricity and ultimately send it to Texas. There’s lots of ways that had to happen, but, you know, they could do all these great things. And so when I came back and met with David, I was like, ‘Yeah, I think there’s something here, if we can ever get to grid tied.’ I remember having that conversation in your old office and being like, ‘I think there’s something here.’ And so I came on at that point. I think it was two weeks left.

DB
I mean, cash was always tight. Personalities under stress and fatigue sets in. And I think at the time, there was a decent group of owners and board that said, ‘Okay, batteries are inevitable, it’s a matter of when and getting the right product along there.’ But why were you nuts enough to say yes? It seems like you had options.

JB
I think you know what? I just could see where it could go, right? And I think at the time, really the mindset for the grid tied stuff was renewables, right? So solar, wind, and really the mindset towards Mother Nature ultimately generates when she wants to. We all appreciate her, but she’s not reliable. How do we make it so that we can have energy on demand? And the only way to do that was, was storage. And that’s grown, not to jump too far ahead, but if you think about where we are now, with the total electrification of our world, is what we’re ultimately trying to do. And I’ll give a great example. I am jumping way ahead, and I apologize, but if you look at what we’re trying to do..just use EVs as an example. There’s 300 million registered internal combustion engines on the road today. We all have friends who forget to register their car, so there’s probably way more than that, right?

DB
I may have one.

JB
If you think about that, all of those cars generate their own electricity. 300 million of them. And we’re saying by 2035, they’re all going to be off takers of the grid, right? So the grid that’s antiquated, mostly in the US, we need a lot of help at the grid level. Right now, most utilities will tell you that anyway. And so all that’s happening. We’re saying, okay, all of those are going to become consumers, that’s a significant load, right? For the record, a house in the United States uses about 30 kilowatt hours a day. By 2035, the average electric vehicle will be 135 kilowatt hours. Think about that. So not saying that they’re going to use it all, but that’s the capacity potentially. And while, right now, we drive short ranges with our electric vehicles, and most people that drive the long range drive with gas, so that’s not going to be an option in 2035. We’re also saying by 2035, you can’t generate electricity by pushing a button anymore. Wind, solar, hydro, those are our options. So that means that us greedy humans, we want electricity when we want it. The truth is is electricity is the most taken for granted entity in the world. None of us even realize it’s on right now, until an idiot like me makes a statement like that. The truth is is we are now going to be so dependent on electricity that there aren’t other options anymore. So how do we make that ultra reliable when our generation sources we can’t control? So the only way to do that is with storage. We started to see that early on, and started really with the renewable energy, because it changed where the peaks happened. And so now, we have to load shift so much more. And as Vermonters, we’re super fortunate. I don’t even think we understand just how fortunate we are that we have Green Mountain Power.

DB
And Velco. And they know each other. They trust and they talk.

JB
We’re owners in them. When we do stuff here for Velco, it goes to the utilities who have ownership. All that money stays in the state. It’s actually really wonderful to David’s point. But when you look at GMP in particular, GMP is really a thought leader in our industry, in the utility industry. There’s a lot of them, but GMP is pretty dynamic. Mari McClure, the new Mary, is pretty amazing. And Josh Castonguay is, I was gonna say a treat, but truly he’s a gift to us. He really understands what needs to happen, how things need to happen. And the coolest part is he really doesn’t say no to ideas, he finds a way to make them work. That’s so rare, right? So we have all these great assets here that really help Vermont become a leader in our electrification goals, and how we can do that.

SRG
I mean, GMP is a B Corp. We’re big GMP fans over here. First of all, I love that you started in a consulting role and then kind of moved it because, like, yeah, you gotta see what’s what’s going on under the hood, right, and see if it’s the right fit for you. But would you say that your kind of excitement in renewables is what drove you to take that role and jump in and not start from the easiest position?

JB
It was a driver. I think it was a driver, for sure.

DB
It must have caused that irrational behavior.

JB
Well,

DB
I was an asshole a lot too. So I’m like, ‘Okay, why would this rational, successful person want this?’ And I think I give you a lot of credit for it.

JB
I think renewables were a part of it, for sure. I grew up in the utility mindset. I remember sitting at the dinner table with my dad as he’s clenching his jaws because it was stormy outside. And so being a part of overcoming those hurdles, being able to be a tool in the tool belt of a utility to help them secure that. I think, because we’re in this industry, we look at electricity and electrical supply a little bit differently. The example I presented was, like, our computers and the lights are on and all that, right? But really, it’s way more than that. It’s an elderly person at home with a ventilator. Or dependent on food. We’ve all seen the studies that have come out recently that if the electrical grid went down for a long period of time, I think it was, like we have five days.

SRG
It’s a rude awakening. Like, every winter I lose power for a few days and it is such a rude awakening, I just keep opening the fridge. I’m like, ‘Damn it,’ yeah, exactly.

DB
Or the profound heat vents out there. And again, power causes air conditioning to go off. It’s really, it’s life support. It’s a bold new world. So Northern Reliability, you were there a few years. You found a couple great partners and KORE Power. So how did that come together, the merger, what was sort of the the incentives and factors at that time driving it?

JB
Yeah, I mean, there was a couple things, that’s really good question. The first was, we were doing business with the government. So, good stuff, like working with EPRI and and other groups. But the Buy America Act came into play, and it was 50 plus 1% domestic. And at the time, we were working really closely with Samsung and LG. We were really high-end partners. We would test their equipment. We did a lot of stuff. Our longevity is key. NRI is the oldest energy storage company to our knowledge in the world. 54 years of building systems, soo over 1000 systems deployed, crazy location,

DB
all seven continents.

JB
These were all David’s marketing pieces that we’ve latched on to, but all true, which is amazing, oil rigs, mountaintops, you name it, we’ve put systems in places. So we had this really long history. So we had a lot of respect in the industry. We would test inverters for companies, everything that you can think of. And so we were working really closely with Samsung in particular, and we overcame the 50 plus 1% but it was, like barely. It was like, like 52 and a half or something crazy. And so we started really looking for battery manufacturers in the US and there aren’t any. It was really difficult. And the more we looked, the more we wanted it. You know, that whole thing where, if it’s not there, you really want it more. But we could also see sanctions coming and things changing in the industry, and certainly geopolitical changes starting to happen. And at the time frame, right around 2017, the chemistry started to change too. So we were using NMC, nickel manganese cobalt. And then LFP came out – lithium iron phosphate, and a big company called CATL, who’s actually now the largest battery company in the world, came out with LFP. And at the time, there were a couple of, I’ll try to make this quick. Korea had some programs, tax programs, that were really great. And so Samsung and LG are Korean companies. They were selling mostly at home, because the programs were there, and they were selling to anybody that could cross two wires – farmers and Dairy Queen workers, anything you can think of. They were building these energy source systems while they failed, right? Because they didn’t know what they were doing. They were over pressing the batteries, the C rate, how fast they can charge and discharge. They were way extending beyond the limitations. And so they had thermal events. So Samsung, who had zero thermal events to the day of the first event, had 17 in a year. LG had even more. And so there was all these events. So now an industry that was just starting to accept energy storage, was like, ‘Whoa.’ Just put on the brakes, and then CATL came in and said, well, listen, we have this new battery chemistry, and the thermal properties of them are way less. So this mass adoption of LFP happens cheaper. It’s easier to make blah, blah, blah, all these things, but it has limitations too, right? It can’t charge or discharge as fast as NMC, and we need that now with EV charging other things. So really, both have a space in the industry. But when that was happening, it was all coming from China. China is 100% LFP, right? So that was a big deal, too. So we saw that happening. We needed to find a US supplier. We found KORE Power, or they found us. I can’t remember exactly how that happened. We tested their product. For us, quality was everything, right? Because we learned very quickly, if we had to send people out onto the field, over and over again, it’s costly, and we didn’t have a ton of money, as David talked about, but your reputation is everything. So we made sure that all of our components were exactly dialed in for the application that we were building for, the solution we’re building for. So we found them. We tested their batteries. We liked what they did, and we started using them and systems for Velco, particularly, was the first one that we did, and really liked it. And at the time, we had an idea for mobile energy storage. I had the idea for mobile energy storage, and I’d been talking to battery manufacturers about using their batteries. I didn’t give the idea away, but I wanted to move them, so people could share these assets. And everybody said no. And then when I met Lindsay Gorrill, who’s the the CEO of KORE, he was like, ‘If that’s important to you, Jay, let’s talk about it.’ I was like, ‘Yeah, I got one.’ And so we ultimately built Nomad Transportable Systems together, and saw the benefits of a battery company and the solutions company working together. Ultimately merged just about three years ago, just over three years ago, and have grown exponentially since. And in that time frame, a lot’s happened – DOE loans and working through different programs, and the IRA and all kinds of great stuff. So it’s amazing.

SRG
Amazing. But it started with the Nomad project… that’s really cool. It’s an interesting way to kind of test it out

JB
Yeah, it’s been great. And Nomad has won a bunch of grants, and moving forward, a bunch of really kind of cool things,

DB
It’s a sexy looking trailer.

JB
It really is, it’s a behemoth. We used to joke that if there was a nuclear war. In our facility, we have the beer shepherd, right? So they deliver beer and Darn Tough socks. If there’s a nuclear war, we’re just gonna hop into Nomad. We’ll be fine with beer and socks for weeks.

SRG
There you go. Oh my god.

DB
Since the merger with KORE, and for our listeners, KORE is K-O-R-E Power, with headquarters in Idaho, bulk of the team seems to be here in Waterbury today, and then a big project in Buckeye, Arizona for KOREPlex. So could you just provide an overlay, just where the organization is in terms of people and what’s going on, and Buckeye and… the vision, and how that ties into that whole US manufactured battery supply.

JB
Yeah, absolutely. Well, those were a lot of questions.

DB
But you’ll get it out anyway, you’ll get it out in two sentences.

JB
I’ll just try to bring it all back together. So just like you said, Coeur d’Alene, Idaho is where the corporate office is. Waterbury, Vermont, which was the Keurig facility, we’ve taken over, really the majority of that now. That’s where its solutions are all built.

DB
You went from K cups to kilowatts baby.

JB
That’s right, buddy, and it’s on the wall still. Tthat’s where the majority of the group is. And then in Arizona, we have a growing team in Arizona. And Buckeye is where our what we call the KOREPlex is going to be. That’s where we’re manufacturing batteries. So two phases of that project. Phase one is a seven gigawatt hour facility. We’re also laying a lot of the groundwork for the second phase two, but we’re going to build it in phases. Two gigawatt hours of NMC, the nickel manganese cobalt, and five gigawatt hours of lithium iron phosphate, LFP. We’re doing both there. And a lot of that is we’re supplying the EV worlds too, right?

DB
So 14 gigawatts,

JB
it’ll be 17 ultimately. So five and two of phase one. So seven and then another 10 is phase two. So 17 gigawatt hours, and we’re doing a lot of EV stuff too. The program that we’re working with with the DOE, there’s actually a couple, but the main one for the facility is ATVM, and the ATVM is supporting EVs. So a lot of what we’re doing at the KOREPlex will support EV growth in the US with domestic supply.

SRG
Can I just ask, just to set the scene a little bit for folks that might not know much about the industry… is there anything like that in the US today?

Speaker 1
Not that’s US-owned, no. A lot of the outsides coming in and having partnerships with some of the US, OEM automobile manufacturers, you know, which is really interesting, right? There’s two ways of looking at this. If you look at this from the DOE perspective, one way is that we want independence for battery supply. Upstream and downstream, we want independence; it’s actually necessary. When you look at it that way, we really want to support the growth of US-owned products, and projects and companies. However, the majority of the batteries come from Asia, like 97% of the battery, something crazy. It’s a huge number come from companies either owned or producing product from Asia. How do you catapult that is really, if that partner with them out of the gate, and those are the kind of the two ways, right? So there’s so you’ve seen a lot of partnerships with companies like Ford, SK and others. And then you see not as many, certainly companies like KORE, that are coming to the table. The big differentiator between KORE and everybody else is we already own IP. So we’re not developing batteries. We’ve already developed batteries. We already have them. We are using them.

DB
You have heritage and experience in the field,

JB
That’s right

DB
and a very conservative to adopt industry for safety is more likely to say ‘yes’,

JB
It’s massive. And if you look at what’s happening in our market and our industry, you have companies like FREYR in North Fult, right? These companies that came in and said, ‘Oh, we’re going to build’ and they’ve gotten tons of investment, and they’re still doing pilot lines, because they have to develop that IP, they have to go through that. It’s a long, hard process. And if you follow them, especially on the exchange, you’ve seen them decline in value. It’s hard work, but it’s

DB
It’s tough to go from pilot to project, and you can say, ‘Hey, go to Arkansas.

JB
That’s right. That’s exactly right.

DB
‘And get out to the field and see it, or the micro grid in Colorado.’

JB
So they’re going through that and we’ve already been through that. We are already using our batteries. Our batteries are field tested, you know, since 2000 really, 1718, so we’ve got a lot of product.

DB
So the KOREPlex that might employ over 3000 people at some point out there. I’m not sure we could accommodate that in Vermont ever. So that’s good. What are you up to, employment wise, in Waterbury, between the two companies?

JB
Between NOMAD and KORE? We’re well over 100, probably 130 ish. Total company wide, we’re like 200. In Waterbury… we’re growing there pretty good, we’re expanding our capacities, and we’ll get up to over five gigawatt hours in total product capacity, probably really covering around seven is what we’re looking at. To do that will be multiple shifts. So probably around 250 people in Waterbury. And then, to David’s point, you know, the KOREPlex is going to be over 3000. When we talk again in two years, when we have our Western Mass pow wows,

SRG
Yeah yeah

JB
we’ll probably be in the 3500 or more range.

DB
Oh, stunning from a cute little valley company back in the day.

SRG
And going from 130 to 250 here… do you think that we have people here? What is the workforce angle here? Folks that are listening to our podcast, that are maybe players in the education space, or people looking to change careers, how can we get Vermont ready for that?

JB
We have really good relationships with UVM, the Vermont State Colleges, and a lot of other schools. We have a pretty big intern program.

SRG
Thank you for doing that.

JB
Well, listen, it’s beneficial for us

SRG
I bet, yeah,

JB
We’ve only ever had one person not come back as an employee from all of our years. For us, culture is a big deal. David knows we have a joke. We bought this huge ramp. It was like $120,000. And when we bought it to build bring Nomads in and out of the building, all of our employees were ecstatic, because they thought I bought them a bike ramp

DB
It looks like a bike ramp!

JB
So at lunch, when everybody rides out of the facility to go mountain biking at Perry Hill, or wherever they’re going, you would think that the ramp was for them, and I was happy to support that…

DB
Whatever it takes, Jay.

JB
Exactly right. But we want that type of lifestyle – work hard, play hard. Thing And on snow days, people are in the office at 11, but they’re here till seven, right? So we have, we have the right type of mentality. And so that’s helpful. Our industry is very helpful as well, because people want to be a part of this kind of transitional thing that we have going on. So that’s been really helpful. And we work with the colleges again. We’re working hard in Arizona. We’re working with the local colleges, Arizona State University, there’s a couple of big community colleges, driving curriculum for manufacturing. And a lot of our jobs in Arizona are GED equivalent, which is also really nice, and we want to be a big part of the transition from the mining stuff, everything that was happening out there, giving them nice opportunity, people with really good career opportunities, to move from that to something that’s a little bit more in line with where the power industry is going. So we’re working hard to do a lot of that and I think our our collaboration with JMP, Velco, and others also helps that too. I do think that it’s here. I think the infrastructure is here to support that. We may have to bring some people in, which I don’t think is a bad thing either. But so far, we’ve been really fortunate. And quite frankly, the founding company to NRI, which was Northern Power Systems, which was one of the really early integrators for renewable energy, and lots of other crazy projects. A lot of that talent’s still here, believe it or not. They really ended in the mid 90s – ended, as we knew them – in the mid 90s. And new employees during that time are still working hard. So we’re able to pull, and it’s nice to have them come on. They know our history and what we’ve done and how we’ve done things. We’ve been able to pillage some other companies and pull some people in.

SRG
Nice.

DB
And you’re doing it with other employers and energy around here too, because to have a vibrant place, you need to give people maybe more than one option over time in case it doesn’t work. Or maybe they don’t mountain bike, or they hurt themselves on the bike ramp,

JB
Let’s not go there, David, jeez.

DB
One question I have has to do with, let’s get a little wonky here, is the inflation Reduction Act, the IRA, I’m not sure people appreciate how big a transformational deal…

JB
Yeah, massive

DB
those programs are. Could you maybe give an example to how that program is benefiting KORE?

JB
Oh, yeah, well, and it’s interesting. I will definitely talk about how it’s benefiting KORE. I hope everybody sees how it’s benefiting the nation. Because it’s, to your point, this is transformative. This is a huge piece of legislation. For KORE, we were awarded a DOE loan through that ATVM program. It’s $850 million; it’s a loan, so we will pay it back. So this isn’t a grant, but there’s a process to go through this whole thing. And we were rewarded that and very soon, following that announcement, the IRA came out, and so for us, it felt very much like, ‘Okay, we received this loan, and the government’s behind us.’ And I know that sounds funny, but a lot of times people say things like, ‘Boy, we really need to be independent of foreign entities.’

DB
Yeah, big oil owning a PH or something

JB
We need to do that, but there’s nothing there to support it. This is so supportive on so many fronts, and I’ll kind of walk you through it for us. For us, manufacturing batteries out of the KOREPlex. We’re part of the 45x program. 45x program, through the IRA, is $35 per kilowatt hour per cell that we manufacture. Then it’s $10 per kilowatt hour per module that you manufacture. For us, as seven gigawatt hours in phase one, that’s $315 million in tax credits a year.

DB
Hold on. Make sure we hear that, 315?

JB

315. DB
     I didn’t do the math. A year. And what do you do with tax credits like that?

JB
Well, there’s two ways to look at that. David, good question.

SRG
Such a nerd over there.

JB
I know. The first way is, it helps us to grow, right? So that’s, that’s one of the really great things. The second way is it allows us to keep our product costing down. When the IRA was announced and they had the 10% domestic, which I’ll get into in a minute, for customers, the 10% domestic kicker, our competitors from China reduced their price by 15% literally the next week, just like that. Bang, right? So trying to overcome the 10%. It doesn’t really and I’ll talk about that in a second. But the $45 per kilowatt hour is massive. If we were to say batteries are $100 a kilowatt hour, 45% reduction in price is nuts. That’s not a small amount. That’s our government saying you won’t fail, right? Like we’re going to make sure you don’t fail.

DB
It’s a strategic industry to be built and the foreign owned incumbents.

SRG
You would hope that they would be that supportive, but

JB
And don’t forget the EV side of things too, right? I could go onto that forever, that’s a whole nother program. But so we have the 45x program. So that’s huge for us now. It means we can compete price wise, because the cost of labor, the cost of everything here is more than China. It just is. There’s nothing we can do about that today. So what we’ve done is we’ve leveled the playing field from a government standpoint, that’s massive. Even, I wouldn’t even say leveled, it’s given us a step up, right? But then for our customers… if we’re working with developers, like we work with Encore, the local company here, right? Working with Encore, they’re putting in projects right now, the domestic kicker to that is an extra 10%, but let’s walk through the entirety of what the IRA does on tax credits for energy storage. They get 30% no matter what. You put energy storage in, here’s 30%. And then you have the domestic kicker, which is an additional 10% and if you choose the right zone where you put it right, you can get extra 10%. So you can get up to 50% tax credit. But the 10% on the domestic battery part, it’s not 10% decrease in the price of the batteries, because batteries are like 40% of the cost of the project. It’s 10% of the whole project. So for us, it’s another 20% . But that’s not where it ends. So that’s really the IRA.

DB
It’s tough not to get excited now,

JB
I know. So just two weeks ago, the tariffs were announced. Did you guys remember that? Okay, so you would think that I would be sweating that a little bit. It’s quite the contrary. In 2026, a 25% tariff to ESS batteries comes into play. It’s interesting that it’s 2026. David, when does the KOREPlex come online?

DB
2025

JB
End of 2025. So for us, the timing is perfect, right? So if you put this all together, $45 on the 45x program. 10% kicker, which is really 20% on the battery price, because the percentage of the total project. And then the tariff, that’s huge differentiation between products coming over. On top of that, just lastly, there’s also shipping costs and landing costs and transmission costs. So as you’re going to the final site,

DB
There would have been no issues with harbors operating that I can think of,

JB
or canals,

DB
or canals, I’m not worried about that Jay

JB
Any of those crazy things. So if you think about how, just how big of a deal the IRA and I’m only touching on that narrow piece,

DB
Yeah that’s just a narrow piece, but again, it’s massive. And I had chance to be with John Podesta, the White House energies czar. It is undeniable and inevitable what is being seeded in little states like Vermont and Arizona and across the country, something to be proud of with a clear ROI

JB
For sure. And one of the best things about this, and I don’t think this gets enough credit, is I spend a lot of time in Washington, DC, and I’m going from we have government people there who know everybody, and when I show up, I’m going from office to office to office to office, and we’re meeting with both sides. And what’s great about it is we’re being supported from both sides. That’s really rare. And in different ways. One side is just quiet, which means they’re supporting you. And the other side’s more vocal. But you’re getting support from both sides, and that’s really, really hugely important, especially as we come into a year where there’s an election coming and lots going on, to know that really feels like the whole government is behind you is really nice.

SRG
Wow. No small feat these days.

JB
Tell me about it.

DB
It’s a little breathless, isn’t it, Sam, the pace of things

SRG
A little bit, yeah

Break
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SRG
So I want to talk a little bit about how the company’s been financed, what sort of strategic investors have been involved along the way, and how has that sort of played out?

JB
Sure, so I don’t know how far back you want me to go. The NRI days, it was really small stuff. David was a big part of that,

DB
Angels

JB
lots of angels. And then actually, we brought in a couple of strategics that were nice, kind of towards the end, end meaning end of NRI, before the merger. And now at KORE, we did a strategic round about a year and a half ago, and had really great strategics. And strategic rounds are a little bit tougher, because you’re going through a lot of how everybody gets to work together, and what are the benefits, and it takes a little bit more time. Siemens was our lead investor, which is really incredible. They do a lot of energy projects all over the world. Brought another big energy company called Quanta. So they own a lot of companies like Blatner and others that have been really great to partner with on projects and things like that. We have brought in Honeywell, a big company called Nedek, which is a big energy company. I don’t want to leave anybody out. I’m sure there’s others that I’m just not thinking of. But we’ve been really super fortunate with who our partners ultimately are. It’s been wonderful. And I think that strategic round would have been even bigger, except right in the middle of that round is when the DOE announcement came out of our loan. And so when you’re going through that process, right, that changes the evaluation. So we really had to cut that round off right then

DB
then Manage dilution from strategics

JB
Totally. And remember, the people that had already invested had no idea that that was in place, right? So they took a bigger chance early on

SRG
Yeah, right.

JB
So we stopped it then, and now we’re doing part of, one of the contingencies on our loan is raising capital, the rest of the capital required for the KOREPlex, and so we’re going through that process right now.

SRG
And can you talk to us a little bit for folks that are out there thinking about the future of their own companies. Why were those partners important beyond just being able to write a big check?

JB
Yeah, I mean, the checks were nice, but your point is right on. Well first, to have a lead investor like Siemens means that the due diligence for everybody else is much simpler. Siemens comes in. They do a ton of due diligence. When they give the checkmark, everybody’s like, Okay, I’m that

SRG
That was a good day for Jay.

DB
They can do the check as an investor, as a technology partner,

JB
For sure

DB
as an owner of facilities that may want to use this exactly.

JB
And they went and they checked out our contract manufacturer who’s building our batteries now. They did real due diligence. It was really wonderful. And so the rest of the followers have been great. Those relationships are so important. Even talking to DOE… it’s so easy for us to be, like, when they ask us a question, we can say, well, you know, Siemens went through this already. And even for the DOE, they’re like, oh, ‘Siemens did? That’s pretty good. We’ll take that.’ So that’s been wonderful. But they also have a lot of companies that they work with and relationships that they have that’s been very beneficial for us, too, as we continue to grow. And another big thing for us is the domestification of the entire supply chain. And so as we look to onshore the entire upstream process, that’s anode, cathode, electrolyte, all that stuff is what we want to onshore. They’re great partners to have in all of that as well.

SRG
Awesome.

DB
And if I recall, they agreed to offtake some supply, and how important was that in factoring the relationship on how to build a syndicate in advance of building a factory, and how that differentiates maybe from others out there that are without customers.

JB
Well, I mean, you know, as investors, you guys know, it’s a big deal to know that what you’re making is going to be procured. That’s a huge deal. Showing surety in offtake for what we were trying to accomplish is hugely important for future investors, for the DOE, for everybody. Because no one wants to invest in something that is building a product that may or may not be used, right?

DB
Or a technology that maybe isn’t thermally proven enough

JB
Or stale. There’s all kinds of things. For us, and I didn’t talk about this earlier, and I probably should have, but the NRI side of things was hugely important – the KORE side of things is hugely important – but our verticality is a real separator. I like to say from Earth to operation

DB
I say from mine to micro grid

JB
That’s pretty cool. In Waterbury, we have a network operating center that. It’s really, truly, second to none.

DB
I wish more people could see that.

JB
It’s a big deal. We have like, 100 screens in there. It’s all kinds of stuff. But we monitor every system. We have one second data from every system ever built, anywhere.

SRG
That’s pretty damn good.

JB
That’s crazy, right? So we take all of that information, we overlap it with weather. We have 30 plus years of weather data. We have ISO market data. We have all this stuff, and we bring it together, and we can determine how, when and why systems need to be operated. Whether it’s for operational standards, for revenue standards, all these things come into play. So when companies choose to work with us, there’s no pointing fingers. There’s no oh, ‘They didn’t do that. Or the battery manufacturer didn’t do that, or it’s all us.’ So we just take ownership. If there’s something going on, we fixed it long before something ever happens. We’re able to identify things on a safety level. That’s massive, because it’s our system all the way down to the cell. So we understand voltages, everything, we read everything. There’s no limitations to our ability to to access data. That’s huge in the industry.

SRG
Yeah, right.

DB
Want to go check it out someday? It’s kind of cool. There’s more monitors than I recall, for sure,

SRG
I’ll have my hands in my pockets, I won’t touch anything

DB
Don’t touch anything

JB
You do have to sign your life away when you walk in the door, but it’s not that big of a deal.

SRG
It’s fine.

DB
Don’t touch anything, Sam.

SRG
Sorry. Can I ask a question, Dave? I’m just curious. Dave was gonna jump in, but I just want to know what gets you most excited about the future of energy storage? Like Jay, personally

JB
I’m not excitable at all, right? Well, it gets me most excited. I think, well, you know, I’m kind of a rarity in our industry, just because I come from the utility mindset, rather than the other way around you, just the entrepreneurial mindset, going and dealing with the utility mindset. Yeah, I kind of come from the other side. I think I look at it as more offtake. And what’s exciting about that for me is the surety of the grid and understanding the importance of electricity and being able to have products that we put in that allow us to support that and make sure that it’s reliable. In telecom, we had a 99.98% uptime, and you had to have that for E 911 standards and all kinds of other things. People getting stuck in elevators, all kinds of stuff, right? And on the electrical side, actually, the need is higher; I don’t want to say higher than E 911, but if you think about the dependency

DB
Always on

JB
Always. These poor utility people live in this world of constant, it’s like constant fear, right? And they don’t get any credit, by the way, right? Because that analogy I gave earlier that we all don’t understand, it’s on and then it’s off. The truth is, it’s off and we’re all angry, right? Oh yeah, the power’s out, whatever. You know, everybody gets upset. And, you know, the utility scrambles to get it back online. And I truly mean scramble. They put all their assets, all their focus, all their attention on

SRG
24/7, yeah,

JB
24/7, right? And they’re living in a constant world of what’s the weather doing, what’s going on, what’s happening. How do I make sure there’s enough electricity there? We have a customer this, you know, the power quality is not good. And, you know, east down road somewhere in Vermont, right? And so they live in that world of constantly supporting people with no appreciation. And people pay bills. And then there’s, ‘My electricity is so expensive.’ But as you look at it, it’s not an easy job. So for me, the excitement lies in helping utilities, helping CNI customers, finding ways to make electricity cheaper, more accessible and reliable,

DB
That kind of leads into that one question I had, as you look across the landscape, is there one like real bottleneck that’s preventing more mass adoption? Is it the wires, or is it just the supply and cost? Or what regulation? Is there anything that just keeps coming up time and time again?

JB
I’m gonna do the same thing I always do to you David. I’m gonna answer this in two ways. The first is, adoptions happened, which I think is really great. That took a long process. As you know, you were right there with us through the whole thing. The adoption process has happened. It’s identified as the solution. It’s necessary. So what’s really great about that means that we’re not overcoming the hurdle of trying to convince people to do it anymore.

DB
Trying to convince Naushon Island to install the grid.

JB
Yes, that’s exactly right.

DB
You didn’t think I was gonna remember that.

JB
Oh no, I know you wouldn’t let that go. So I think you know that that’s really great. The tough part in again, just goes back to the utility a little bit, is that the permitting and interconnection process takes time. Everybody’s like, ‘Oh, how do we speed this up?’ And I hear this all the time, you know, FERC meetings and other stuff. And the truth is is you can’t. That process is in place for a reason

DB
So we shouldn’t?

JB
Well, I mean, I would love it to be. If we could expedite it, potentially some safe, proper way, right, and maybe give it more attention, or whatever it might be, I think that’s an answer. But the truth is, is that you know, if you’re going to put 100 megawatt hour facility in downtown Burlington, BED needs to know how much power, where it’s going, make sure that the lines are safe, they can support that much electricity, the substation can support that much, and everything’s built, and by the way, there also has to be offtake, otherwise you’re putting 100 megawatt hours into the grid is just going to sit there and no one’s going to use it. And there’s issues with that too. So that process is really important. There’s a safety process, it’s a reliability process, and there’s an asset use process that goes into that. It’s very important. But that’s one of the things that does slow it down a little bit, David.

DB
You got that, Sam?

SRG
I do, yeah.

DB
You started your career in energy, right? Demand side.

SRG
I worked for EnerNOC, back in the day. When I was still a little weak college student at Northeastern. They didn’t let me in the NOC though, yeah,

JB
We try not to let David in. He gets in, though. Man, it’s crazy.

DB
I just thought no one got in.

SRG
He just wiggles doorknobs.

JB
He gets in. He’s got codes or something. I don’t know how that works.

SRG
I wanted to talk a little about just Vermont startup scene, and what is getting you excited, whether it’s an energy or tech or, you know, other companies out there that if you have the time and energy to lift your head up from what you’re doing, what’s getting you hyped?

JB
Yeah, I don’t as much as I used to, but I’ve been part of mentoring programs and stuff like that, which I really enjoy. And if I ever get to the point

SRG
Great, we’ll remember that,

JB
Yeah, if I ever get to the point where I can slow down, that would definitely be something I love.

DB
You do Delta Clime VT and their energy thing.

JB
Yeah, I do. I do a lot of that stuff. And I think it’s all great. I think what Vermont has going for it is really good education institutions, right? And I don’t, I don’t know what they’re called anymore, I think they changed their name, but the tech school and Randolph, which is now used to be Vermont Tech, now it’s maybe something,

SRG
I think it’s Vermont tech?

JB
Is this still Vermont tech? Or, I thought it was, like,

DB
part of the university?

JB
yeah, University of Vermont, Randolph, whatever the tech program there,

SRG
we know what you’re talking about. We’re picking up what you’re putting down.

JB
Is amazing, right? Like we, the head of our electrical group, is this young man named Jarek, and I call him Doogie Howser. I’m probably aging myself a little bit here. Graduated early from high school, graduate early from college. He’s an electromechanical engineer. This kid’s really amazing. Everybody’s a kid to me now, that’s just sad in itself. But he is just really amazing. He came from Vermont Technical College. He’s great. We have a bunch of kids. Alex, head of our mechanical group. Alex went there too. And so we have great… I think we have kind of good growth educational platforms here. UVM is amazing. We work with UVM quite a bit on different programs and stuff that they have going on that will be a part of and help with and walk through. Champlain College is a great technical school. Their placement percentages are ridiculous. A lot of programming, a lot of computer science stuff happening there. So we have a lot of lot of great things here, and I think that leads to emerging technologies that we see here. And I also, I think that we’ve had a good history of technology in Vermont too, and we’re an example of that coming out of Northern Power. A lot of great companies have come out of Northern Power, a lot, and we’ll probably see more of that too, not just from Northern Power, but from other great companies

DB
You’ve got Dynapower is a leader in what they do, Beta is doing so many things, historically way back we had Eveready had two facilities here. So sure, you know, there’s been batteries and alternative energy companies for a bit now.

What’s the headline of the year to come here? What do you think? What’s your crystal ball?

JB
For KORE? Are we talking about KORE?

DB
Yeah KORE

JB
There’s lots of headlines, David, you got to dial me in a little bit.

JB
I could say something as simple as staying on track with because our projections and our growth are are kind of astronomical. And making sure that we’re laser focused on stuff. Lindsay and I spend a lot of time on, you know, where we’re going, why we’re going there, what our projections are going to be, how we’re going to do this. And for KORE, the vertical nature of Vermont in particular is very, very important. We could sell batteries, it’s a commodity. You sell it to anybody, not anybody we talked about that earlier, but, you know, people in the industry. But selling a full solution for us means that we get to be a part of that relationship for a really long time. So when we build a full solution for a customer, we build it, we design it, build it, install it, and then we monitor and maintain it for as long as the power purchase agreement is in place, or whatever it might be. It’s 20 years. We’re monitoring systems that are decades old at this point. And we’ll call a customer and say, ‘Hey, we’re watching your voltages, they are starting to slide.’ System’s 17 years old, it might be time for some new stuff. You were talking about when Sean, I’ll one up you. We just rebuilt. We just rebuilt it for the Ford’s Family Trust, right? It was Cuttyhunk. Was the one you were really but it was all we just rebuilt that, right? And by the way, that was one of the first micro grids in the world.

DB
I don’t think there’s much appreciation for the the solutions that have come out of your company in Waterbury for the first micro grid in Rutland between Tesla and GMP. Well, guess what? Your engineers are the ones that showed them both how to do it at the time.

JB
Exactly right.

DB
Or this integrated solution, from mine to micro grid, or whatever you said,

JB
Earth to operation,

DB
yeah, is really exciting. And I don’t think there’s broad acceptance or knowledge here in Vermont, where just how big a company you actually are,

JB
and growing to become

DB
Yeah it’s just early innings now in the inflection point. So, really exciting. Thank you, Jay,

JB
Yeah, my pleasure

DB
for making time with us today and sharing a bit of the story. We send people down to Laurie Flaherty all the time. We’re looking for careers and internships. We’ve got a final wand question for you

SRG
Yeah, it’s your turn here, Dave,

DB
Did I say final wand? Wow

SRG
Yeah, I know

DB
Magic Wand.

SRG
Final wand is scary.

DB
Super powers, Jay. If there was one thing you could change in Vermont with your magic wand, what would it be?

JB
Oh my God, you guys couldn’t give me that before, like, give me some time to think about this.

DB
It’s really a test if you’ve listened to the end of our podcast, because we ask everybody this

JB
Good one, okay, magic wand. Honestly. I mean, you and I were talking outside. I’ve been in Vermont for a long time, and I love it here. I chose to live here. It wasn’t like I grew up here, and I stayed because I felt like I needed to stay; I chose to live here. I came here on purpose, and it’s such a wonderful place. For me, great place to raise kids. I’m in Waterbury, so family feel, I know you get that in Stowe as well. And that’s huge. So if I had a magic wand, I would want to grow that by keeping it the same, which is somewhat of a contradiction in terms. But what makes Vermont great – that small town, collaborative feel, working together, making things really wonderful – I would love to grow while keeping that. That would be my magic wand thing.

DB
That’s another billion dollar solution. Figure that one out.

JB
It’s probably more than that. I mean, what 650,000 people in the state, we have room for growth.

SRG
We sure do

JB
But I don’t want to lose what made us the number one state in the country for quality of life, the number one state in the country for safety, all those things that have been really wonderful, I just don’t want that to go away.

SRG
Yeah, I love that.

DB
Let’s do it. This has been started here a podcast sharing the stories of active, aspiring, accidental entrepreneurs. This series supported by the Vermont Technology Council and consolidate communications. I’m charged up, Sam, let’s get back to work.