This paper presents a novel theory to evaluate the use of regenerative energy in traction systems by introducing the concept of regenerative compensation factor, which can be seen as analogous to the concepts of reactive energy and power factor in AC power systems. The proposed theory is applied to a regenerative energy case study in Metro de Medellin, using computational tools (OpenTrack and OpenPowerNet), and field measurements of the operation of two regenerative compensation prototypes. The results show that the proposed compensation factor provides technical guidelines on regenerative energy management, and is useful to identify potential energy savings, to determine a better use of installed railway facilities, and to propose improvements in conception, design and operation of an electric traction system.