Maintaining the accumulator pressure regardless of its energy level and tracking the power demanded by the electrical grid are two potential advantages of the Compressed Air Energy Storage (CAES) system proposed in [1, 2]. In order to achieve these goals, a nonlinear controller is designed motivated by an energy-based Lyapunov function. The control inputs of the storage system include displacement of the pump/motor in the hydraulic transformer and displacement of the liquid piston air compressor/expander. While the latter has a relatively low bandwidth, the former is a faster actuator with a higher bandwidth. In addition, the pneumatic path of the storage vessel that is connected to the liquid piston air compressor/expander has a high energy density, whereas the hydraulic path of the storage vessel is power dense. The nonlinear controller is then modified to achieve a better performance for the entire system according to these properties. In the proposed approach, the control effort is distributed between the two pump/motors based on their bandwidths: the hydraulic transformer reacts to high frequency events, while the liquid piston air compressor/expander performs a steady storage/regeneration task. As a result, the liquid piston air compressor/expander will loosely maintain the accumulator pressure ratio and the pump/motor in the hydraulic transformer will precisely track the desired generator power. This control scheme also allows the accumulator to function as a damper in the storage system by absorbing power disturbances from the hydraulic path generated by wind gusts.