Cooling with ice thermal storage can be the most costeffective, reliable, system approach to cooling different types of buildings. The ice thermal storage can reduce energy costs by shifting the cooling cost from on-peak to off-peak periods. The paper discusses the optimal design of ice thermal storage and its impact on energy consumption, demand, and total energy cost. A tool for optimal design of ice storage is developed, considering variables such as chiller and ice storage sizes and charging and discharge times. A genetic algorithm is used to solve the optimization problem. Detailed simulation studies using a real office building located near Orlando, FL, including utility rate structure, are presented. The study considers the effect of the ice thermal storage on the chiller performance and the associated energy cost and demonstrates the cost saving achieved from optimal ice storage design. A whole-building energy simulation model is used to generate the hourly cooling load for both design day and entire year. Other collected variables such as condenser entering water temperature, chilled water leaving temperature, and outdoor air dry bulb and wet bulb temperatures are used as inputs to a chiller model based on DOE-2 chiller model to determine the associated cooling energy use. The results show that a significant energy saving can be achieved by optimal ice storagedesign using the tool proposed in this paper.