This paper presents a simulation environment that can evaluate the benefits of using simultaneously building thermal capacitance and ice storage system to reduce total operating costs including energy and demand charges while maintaining adequate occupant comfort conditions within commercial buildings. The building thermal storage is controlled through pre-cooling strategies by setting space indoor air temperatures. The ice storage system is controlled by charging the ice tank and operating the chiller during low electrical charge periods and melting the ice during on-peak periods. Optimal controls for both building thermal storage and ice storage are developed to minimize energy charges, demand charges, or combined energy and demand charges. The results obtained from the simulation environment are validated using laboratory testing for an optimal controller. (C) 2012 Elsevier Ltd. All rights reserved.