As far as I'm aware, if you run out of batteries, that means enemies spawn to no end until you move up to the next floor. Sort of like how the Spirit Toot item gets rid of the "Lights Out" but causes enemies to spawn endlessly, even in the lobby. The Power Gauge upgrade helps keep track how much battery (Or time) or have left on a floor until the lights cut off and all the ghosts come in to swallow you whole