This paper discusses the development of hydroelectric pumped storage in the United States and the growing need for peaking power. Energy storage in the form of water stored in a higher reservoir for later release to a lower reservoir to generate electric power is a practical and proved concept. In areas where stored energy is needed, but where no suitable sites are available for conventional pumped storage with both the upper and lower reservoirs above ground, underground pumped storage can be the answer. The feasibility of using underground caverns for the lower reservior in areas that have suitable rock formations is examined here.