New trains with AC propulsion promise higher performance, reduced starting energy use, regenerated braking energy savings, lower maintenance, and a broadened range of operating conditions. However, some Transit Operators have found that these new trains have not fully achieved the expected regenerated energy savings. Transit Operators have also experienced traction power problems such as severe voltage sag or train low voltage shutdown due to the increased power demand of these higher performance AC trains. An effective Energy Storage System (ESS) can resolve these problems at a favorable capital cost. Candidate ESS technologies include flywheels, supercapacitors, and batteries. This paper analyzes the ESS economic benefits in two dimensions: energy and power savings, and capital costs to correct voltage sag. These costs are used to calculate a return on investment (ROI) for a range of ESS cost inputs, at two typical US transit systems: an urban subway system with 10-car trains and a suburban light rail line that runs trains of two to four railcars. ROIs range between 15% and 35% depending on the ratings, conditions, and usage of the rail system and ESS. The paper then presents results of a rail network simulation quantifying ESS performance in supporting traction power voltage on a dense East Coast electric commuter railroad.