For much of the day, only a single track was open in and out of New York City.
Northeast Corridor and North Jersey Coast Line trains were subject to hour long delays.
Amtrak passengers also faced delays on travel between New York City and Newark.
Amtrak spokesman Cliff Cole said that power was lost in a Hudson River tunnel around 9 a.m.
Four NJ Transit trains were stranded inside the tunnel. All were removed by early afternoon.
Amtrak crews then spent a couple of hours repairing damage to the overhead wire system inside the affected North River Tunnel.
By 2:30 p.m., the tunnel was reopened, but delays were expected to continue for some time.
New Jersey Transit spokeswoman Penny Bassett-Hackett about 1,500 passengers were on the two of the trains that were stranded until about 11:30 a.m.
"We certainly apologize for that," she said. "We certainly understand that it was a very difficult commute for these passengers."
Lawyer John Doherty was stuck aboard the 8:15 a.m. train from Glen Ridge, N.J. He said his commute usually takes about 35 minutes but stretched to three hours.
The lights were working on the train but the air conditioning was not.
"It was hot and humid," said Doherty, who looked slightly damp and had his tie loosened. "Everybody stayed calm and nobody got too upset. A lot of jokes and just waiting."
"They kept us informed," Doherty added as he rushed off to reschedule a missed meeting. "They informed us that they had no information."
Both arriving and departing trains at New York's Penn Station were affected.
Gerry Diamond was hoping to take the 11:07 a.m. train to Trenton and then go to Newtown, Pa. He wasn't sure what to tell the people who were supposed to pick him up.
A "delayed" notice was finally posted, but it gave no further clues.
Even Indiana Governor Mitch Daniels was more than 30 minutes late for his event with Governor Chris Christie in Lawrenceville, New Jersey because of the Amtrak delays.
Other rail lines were also impacted. MidTOWN DIRECT trains were diverted to Hoboken for much of the day.