Well I called Lionel and the simple answer was yes it will run on AC power!
So avert your eyes! This is an MTH engine running!!
The track itself is very smooth and far superior to MTH track. I only hope they make different sizes because we do a train show every halloween and this track lighted up would be fantastic!
My only tiny gripe is when you shut off the engine the track stays lighted under the engine but that's minor to say the least.