The main objective of this paper is to show the economic and environmental benefits that can be attained through the coupling of borehole thermal energy storage (BTES) and combined heat and power (CHP). The subject of this investigation is the University of Massachusetts CHP District Heating System. Energy prices are significantly higher during the winter months due to the limited supply of natural gas. This dearth not only increases operating costs but also emissions, due to the need to burn ultra low sulfur diesel (ULSD). The application of a TES system to a CHP plant allows the plant to deviate from the required thermal load in order to operate in a more economically and environmentally optimal manner. TES systems are charged by a heat input when there is excess or inexpensive energy, this heat is then stored and discharged when it is needed. The scope of this paper is to present a TRNSYS model of a BTES system that is designed using actual operational data from the campus CHP plant. The TRNSYS model predicts that a BTES efficiency of 88% is reached after 4 years of operation. It is concluded that the application of BTES to CHP enables greater flexibility in the operation of the CHP plant. Such flexibility can allow the system to produce more energy in low demand periods. This operational attribute leads to significantly reduced operating costs and emissions as it enables the replacement of ULSD or liquefied natural gas (LNG) with natural gas.