An innovative home battery pilot will go into effect after receiving final regulatory approval last week.

The New Hampshire Public Utilities Commission on Thursday affirmed the plan, which would use a network of small batteries in homes, owned by the utility and third parties, to lower systemwide demand during peak hours. The program is intended to lower costs for ratepayers overall while saving money for the host customers based on a time-of-use rate.

Liberty Utilities reached this compromise with stakeholders in November. The utility originally wanted to own and operate 1,000 Tesla Powerwalls in customer homes. Industry stakeholders countered that third parties should have a chance to deliver the service.

The approved plan grants that wish (see this previous coverage for more details). Liberty will get the first move, installing up to 200 Powerwalls in the homes of customers, who will pay $2,433 per system upfront, or $25 per month for 10 years. The customers will go on a time-of-use rate designed to shift consumption away from peak times.

The design aligns customer and system incentives. Participants are charged more during the hours that are more expensive for Liberty to deliver power, but they can avoid hefty bills by using stored power. The batteries also provide backup power in an outage.

Things get more interesting when Liberty predicts a system peak event. It takes control of the home batteries, charges them on cheap late-night power, and discharges as needed during the peak window to reduce the total draw from ISO New England. The batteries collectively act like a decentralized power plant to lower charges that all Liberty customers pay for.

If the first group of batteries meets performance targets, the utility will be able to install 300 more. On a parallel track, stakeholders will devise a system for third-party companies to offer this service to Liberty's customers. The independent companies would shoulder the cost and risk of deploying the equipment and delivering peak reductions in exchange for a cut of the savings.

The onus is now on Liberty Utilities to show that it can operate the battery network effectively to deliver savings for participants and ratepayers at large.

If it delivers, this program offers a new model for how to leverage private investment in distributed energy to reduce overall grid system costs. It also balances increasingly sophisticated price signals with a means of managing that complexity on behalf of the homeowners.