This paper describes how the installation of energy storage systems, co-sited with hydroelectric projects, can offer both economic and environmental benefits by enabling a broader range of electricity performance, capitalizing on its flexibility and grid reliability, while mitigating critical environmental impacts or improving environmental outcomes across U.S. rivers and streams. The paper attempts to link environmental outcomes to energy storage utilization. It offers a comprehensive inventory of research-grade work, site-specific studies, policies, and pilot projects regarding energy storage and hydropower that show significant environmental implications. It provides an outline of methodologies given the known costs and attributes of storage technologies, with case study illustrations. It outlines the key components of a methodology that could be applied within the context of specific projects to reveal the environmental benefits of energy storage paired with hydropower production to properly size the storage systems to seize benefits. The actual methodology would be developed in future work. Finally, we provide a set of gaps to be addressed in future work as this important idea gains traction.