While energy storage is a hot topic these days, the concept has been around for a very long time. Pumped storage hydroelectricity has been used commercially for many decades with numerous large scale installations throughout the U.S. The business model for pumped storage hydro is actually quite simple: pump water up a hill when prices are low; let water flow back downhill and spin turbines to generate electricity when prices are high. As long as the cost to pump the water uphill is less than the revenues generated when it flows back down, the business model is sound. There is a great wiki on pumped storage hydro that you can read here.
In the late 1960s, load growth in New England was robust and the New England Power Company, an affiliate of the New England Electric System (NEES) responsible for power plant construction and operation, needed to add peaking resources to the system. Construction of the Bear Swamp Hydroelectric Generating Station began in the late 1960s and concluded in 1974 when the project came online. The Bear Swamp plant is located along the Deerfield River in Rowe, MA, just below the VT - MA border. The Deerfield River is often referred to as the "hardest working river in New England" because of its many hydroelectric facilities.
Bear Swamp has some really interesting operating characteristics. It can ramp from zero to full output (~585 MW) in three minutes and holds up to 3,000 MWhs of energy which can be discharged over a period of five hours. It takes approximately seven hours to recharge Bear Swamp by pumping water back up into the impoundment. Over the last several years, it has had a capacity factor of approximately 8% which is in line for a peaking resource. Its total annual output over the last four years has ranged from 350,000 to 450,000 MWhs and the amount of output is heavily influenced by the price spread between on and off peak hours.
The story of Bear Swamp is a familiar one in the ISO-NE power market. The plant was divested by NEES in the late 1990s as part of deregulation. It was purchased by USGen New England which was a subsidiary of National Energy & Gas Transmission (NEGT), which in turn was a subsidiary of Pacific Gas & Electric (PG&E). Thanks to Enron, PG&E had to declare bankruptcy in the spring of 2001 and its subsidiaries were forced into bankruptcy as well. If you click on the NEGT link above, you'll see that their website is still up and discusses the unwinding of the company. They also still have a page up showcasing Bear Swamp as one of their assets.
In the spring of 2005, Brookfield (then known as Brascan) and Emera purchased Bear Swamp and the Fife Brook Dam (a 10 MW run of the river hydro facility) for approximately $92 M. They have been operating the facility since and Emera's financial statements indicate that it is profitable. There is currently a long term PPA in place with the Long Island Power Authority (LIPA) for a portion of Bear Swamp's output. The LIPA PPA was enabled by the construction of the Cross Sound Cable.
Brookfield power has renamed Bear Swamp the "Jack Cockwell Station" in honor of Brookfield's chairman and former CEO Jack Cockwell, but the name hasn't really caught on yet. As far as we're concerned, its Bear Swamp, but Brookfield has uploaded some really great pictures of the facility on Flicker here and they refer to the facility by both names.
In summation, pumped storage hydro is a proven low carbon dispatchable peaking resource and places like Bear Swamp have been providing energy storage to the grid since before most current energy storage entrepreneurs were in grade school. Pumped storage hydro is proven and totally safe (unless you forget to shut off the pumps and overtop your dam) and Bear Swamp will continue to provide a peaking resource to the ISO-NE grid for many years to come.