Thermal storage clearly benefits cooling system owners by reducing electric demand charges. However, the use of thermal storage is widely believed to increase overall cooling plant energy consumption. Data from the first full season of operation of a 4.4-million-gallon (16,676-m3) stratified chilled-water storage addition at a US university demonstrates that a well-designed and operated system can actually improve plant efficiency. Energy penalties associated with thermal storage were offset by more efficient chiller operation. Design features and operational procedures that tend to minimise energy consumption in stratified chilled-water storage systems are discussed and illustrated with data from the university system.KEYWORDS: energy consumption, energy conservation, energy storage, district cooling, temperature stratification, chilled water supply, cooling, USA, efficiency, performance, chillers, costs, coefficient of performance.