The FREEDM microgrid is a test bed for a smart grid integrated with Distributed Grid Intelligence (DGI) to efficiently manage the distribution and storage of renewable energy. Within the FREEDM system, DGI applies distributed algorithms in a unique way to achieve economically feasible utilization and storage of alternative energy sources in a distributed fashion. The FREEDM microgrid consists of residential or industrial nodes with each node running a portion of the DGI process called Intelligent Energy Management (IEM). Such IEM nodes within FREEDM coordinate among themselves to efficiently and economically manage their power generation, utility and storage. Among a variety of services offered by the DGI, the Power Balancing scheme optimizes the distribution of power generation and storage among the IEMs. This paper presents the key aspects in implementing such a scheme and outlines the preliminary results obtained by integrating the proposed methodology with a functional SST model of FREEDM. The results demonstrate the potential benefits of adopting advanced 'smart' technology on a local grid.