California State University, the nation’s largest public four-year university system, and Advanced Microgrid Systems announced Wednesday the installation of a portfolio of Hybrid Electric Buildings that will reduce peak energy costs and provide critical support to the electric grid in the Aliso Canyon area.

The project will be implemented in multiple phases and will be the largest battery storage project at an educational institution in the nation. The first phase of the project will reduce the CSU’s electric utility costs by more than $3.3 million and will store enough energy to power 2,000 homes.

“This exciting partnership adds to many collaborative efforts implemented by the CSU to boost efficiency and cut costs,” said CSU Executive Vice Chancellor and Chief Financial Officer Steve Relyea. “By helping integrate more renewable energy onto the grid, this transformational system will support California’s environment and direct resources to support the academic mission of the CSU.”

In the initial phase of the landmark project, San Francisco-based AMS will oversee the design, installation and operation of a 1 Megawatt energy storage system at the CSU’s Long Beach campus. AMS is also anticipated to install two behind-the-meter energy storage systems at the CSU’s Office of the Chancellor and Dominguez Hills campus. With a standardized contract and offering, additional campuses will benefit from ease of enrollment into the AMS storage “program.”

“The CSU is setting the standard for sustainability among higher education institutions, both statewide and across the nation,” said Susan Kennedy, CEO of AMS. “We are proud to work with them and provide Southern California Edison with critical capacity during this time of emergency.”

AMS will break ground at CSU Long Beach this summer with an expected completion date of October 2016. Construction at the Office of the Chancellor is anticipated to begin in early 2017 and be completed by mid 2017. Both CSU locations are located in the western Los Angeles basin, which is expected to experience blackouts this year due to the 2015 Aliso Canyon natural gas leak.

With a financial performance guarantee, Hybrid Electric Buildings provide cost-effective sustainability and support values-driven facilities management. The buildings use Tesla Powerpack commercial batteries to store energy during nonpeak hours, typically at night.

During times of high demand, AMS’s advanced analytics software seamlessly shifts buildings from the electric grid to the AMS energy storage system, reducing grid congestion and easing the need to build additional peaker plants.