Virtual power plant advances, makes backup batteries effectively free for lower-income homes

A backup battery program that advocates say will keep the lights on at more than 1,000 New Orleans homes and businesses when the grid goes down has cleared a key hurdle at the City Council, moving the initiative one step closer to reality.   

The Climate Change and Sustainability Committee on Wednesday adopted a draft of rules and incentives for the next phase of the post-Ida push by politicians and activists to subsidize the distribution of backup batteries, which can provide hours of electricity during an outage or relieve strain on the grid during peak demand.

The cost of the $26.6 million program — formally called the Battery Energy Storage System Distributed Energy Resource Pilot Program and dubbed the Neighborhood Power Plan by its backers — is covered by proceeds from a settlement with Entergy New Orleans over allegations that its parent company mismanaged the Grand Gulf nuclear plant.

Over the past six months, even with the quietest hurricane season on record, New Orleans residents have endured power outages for a combined total of 150 hours, according to District A Council member Aimee McCarron, the chair of the committee.

District A Councilmember Aimee McCarron speaks during a Together New Orleans Neighborhood Power Plan Press Conference on the steps of City Hall in New Orleans, Wednesday, Sept. 9, 2026. (Staff photo by Sophia Germer, The Times-Picayune)

District A Councilmember Aimee McCarron speaks during a Together New Orleans Neighborhood Power Plan Press Conference on the steps of City Hall in New Orleans, Wednesday, Sept. 9, 2026. (Staff photo by Sophia Germer, The Times-Picayune)

“Every outage is a reminder that we need a more reliable and flexible electric grid,” McCarron said. “The investments we are making today are the difference in someone's life, in someone's business and keeping someone out of the hospital for a heat-related illness.”

The full council, which must still vote on the plan next month, is expected to approve it without opposition.  

Incentive structure

Known as a virtual power plant, Entergy can draw on the network of grid-connected batteries to avoid having to buy electricity during price spikes triggered by extreme weather or other disruptions.

When paired with solar panels, the storage batteries have the potential to continue powering homes indefinitely during an outage. Without solar panels, a single battery can last anywhere from six to 12 hours, depending on the home’s consumption and efficiency.

The plan calls for $23.6 million in upfront incentives, half of which would be set aside for business and half set aside for homes. The additional $3 million will go to administering the program for the next three years.

Of the nearly $12 million for residential batteries, 40% has been reserved for households earning 80% or less of the area median income, or about $72,000 for a family of four.

The funding is expected to be enough for about 250 businesses or institutions, 400 low-income households and 800 residential customers. They would be added to the approximately 275 existing grid-connected battery systems.

On top of the upfront cash to help cover the cost of a new battery, ratepayers receive annual payments based on the size of their storage capacity in exchange for allowing the utility to access their stored electricity.

For most residential ratepayers, that payment comes out to about $500 a year for one battery or $1,000 per year for two average-sized batteries, according to modeling from Together New Orleans, one of the community organizations that advocated for the program. Over time, those annual payments will defray the upfront out-of-pocket cost of about $4,400 for one battery — or $6,000 for two.

For low- and moderate-income households, the cost becomes much more manageable. They’ll need to pay approximately $365 up front for a single-battery setup, but that will be more than offset by the first annual incentive to the battery owner.

“There is an important difference between making funds available for low-income households and structuring the program so that those households can actually take advantage of the funds,” said Wendy Beck, a project researcher with the Deep South Center for Environmental Justice. “This program does that.”

Firing up the virtual plant

There was a celebratory mood in council chambers ahead of the committee’s unanimous vote, with attendees repeatedly breaking into applause.

“Today, we are leading the nation,” council member-at-large Matthew Willard told the crowd. “We're making the largest per capita investment in distributed battery storage in the nation."

Several dozen representatives were on hand from Together New Orleans and the Alliance for Affordable Energy, the two nonprofits that originally proposed back in 2024 that the City Council use the discretionary portion of its Entergy settlement on a virtual power plant program.

“No one, no child, no elder should suffer in the heat or the cold, and no one should die in the dark ever again in this city," said Jesse George, New Orleans policy director for the Alliance. 

Entergy New Orleans spokesperson Beau Tidwell said in a statement that the utility is committed to working constructively and collaboratively with city officials and community advocates.

“As we move forward, we will focus on efficient implementation while seeking to mitigate bill impacts for customers who do not participate in the program,” Tidwell said.

Officials have yet to determine how incentive recipients will be chosen. And the rates and budget approved by the committee can be adjusted later, based on how the program performs.

The plan is set to go before the full City Council on Oct. 1 ahead of an Oct. 31 deadline for Entergy to submit an implementation plan that launches the program no later than the first quarter of 2027.