For the large scale of electricity consumer, since the price for the electricity consumption depends on the peak power, the issue for peak power reduction have been being studied widely. Electric railway systems, which is one of the most representative large scale of loads, also has assignment to reduce the peak power since they have high peak power and low energy consumption load characteristics. In the aspect of the economic operation through reduction of peak power, this paper proposes a novel algorithm for power management system in electric railway systems using energy storage.