This paper evaluates the central chilled water system of the Southern Illinois University Carbondale (SIUC) campus using exergy-based cost accounting to quantify the magnitudes and cost impacts of internal losses with the goals of maximizing chiller capacity utilization and minimizing the unit cost of delivered chilled water. Two independent systems, each comprised of a primary-secondary-tertiary distribution network and cooled by a 12,300 kW (3,500 RT) steam-turbine driven centrifugal chiller, were modeled as control volume networks using steady-state rate balances for energy, exergy, and cost. An extensive set of measurements, collected over the 2006 cooling season, was used as the input data for the models. Results show that while the steam turbines are the largest source of exergy destruction, mixing in the distribution loops is the dominant source of exergy unit cost at low cooling loads, and refrigeration cycle losses dominate costs at high loads. Recommendations include: (1) Convert the chilled water distribution to an all-variable-speed, direct-coupled configuration; (2) During low cooling loads use only one chiller; (3) During high cooling loads, increase the flow rate of water through the evaporators; (4) Favor speed control over inlet guide vanes for capacity modulation; (5) Better insulate steam piping; and (6) Consider replacing the steam turbines with variable speed motors.