Ice storage systems reduce the electrical demand charges resulting from air conditioning. Methods for optimizing the installed cost and demand reducing potential of these systems are presented. In a glycol-type ice storage system, the sizing of the chiller and the ice tanks can be optimized algebraically or by computer simulation programs. Low temperature air systems can lower the cost of the primary fans and ductwork in the cooling system. Control strategies can have an effect on the demand reduction obtained from an ice storage system. Chiller-priority control is a strategy in which the chiller is made to operate as much as possible during the day. In Ice-priority control, the chiller is made to operate as little as possible during the day. Constant proportion control is a strategy in which the chiller and the ice tanks each handle a constant share of the load. The advantages and disadvantages of each strategy are discussed.