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It depends a great deal on how big the swing is. Detroit Edison and Consumers power built a 1.8 gigawatt battery to make dealing with it cheaper, so perhaps it is fairly big:

http://www.consumersenergy.com/welcome.htm?./ocompany/index.asp?ASID=17

Their websites utterly sucks, just do a search for 'pumped storage' if it doesn't come up; they appear to be redirecting incoming visitors. Wikipedia also has a page about it, with less hassle:

http://en.wikipedia.org/wiki/Ludington_Pumped_Storage_Power_Plant

Hydroelectric energy storage is highly efficient and offers huge capacity. For example:

http://www.consumersenergy.com/welcome.htm?/content/hiermenugrid.aspx?id=31

There is a big one in Michigan:

http://www.consumersenergy.com/welcome.htm?/content/hiermenugrid.aspx?id=31

The reservoir is a scant 27 billion gallons.

Lakes?

I think they're mainly suggesting that it would be more efficient than storing the same energy in ordinary chemical batteries, which is the current method for storing energy from natural sources for times of higher demand (or lower production, in the case of solar). Presumably their calculations are based on minimizing the inefficiencies for both batteries and compressed air.

Pumped storage systems - essentially hydroelectric systems with a top reservoir, a bottom reservoir, and a system of pumps to move water back up to the top reservoir at times of excess generating capacity - are used in the UK at Dinorwig and at Ffestiniog, and in the US at Luddington, Michigan (and probably in other places I don't know about). This is a reasonably simple, reasonably efficient system of storing energy at time of surplus production and releasing it at times of peak demand.

If you're ever in the neighborhood of Ludington MI, you should check this monster out, it's pretty much the same idea but a tad bit larger than the ones in the article http://www.consumersenergy.com/content/hiermenugri d.aspx?id=31

Here is a link http://www.consumersenergy.com/content/hiermenugri d.aspx?id=31 to the pumped storage plant near my house. It's ridiculously huge, it holds 27 billion gallons of water -- the equivalent of 2 million backyard swimming pools. It supplies Detroit with power during the summer. It runs on an economic timescale, at night when power is cheap they fill the resivoir by running the turbines in reverse. Then during the day when power gets expensive, they open the gates and let the water flow past the turbines creating electricity. They only run it when the cost of pumping the water up into the resivoir exceeds doesn't exceed the profit gained by letting it all out. Surprisingly that happens about 360 days a year.

I once was able to tour the nuclear power plant in Charlevoix, MI, before they decommissioned. I was a little fella at the time.

Looks like that kind of educational oppertunity won't be happening as frequently, now. IIRC, that was the first tour they'd given since the plant was opened. That gives you a sense of perspective as to how common such oppertunities are.

Though other plants may perhaps hold more frequent tours, I doubt few outsiders will get to see the turbines and dynamos of an operational plant.