A dynamic simulation model for forecasting and policy making in the regulated electric utility

A dynamic simulation model is built to assist in making policy decisions related to the regulated electric utility industry. The model built takes into account the interactions between regulation, price, demand, peak load, construction costs, debt, equity and profits. Through the use of the model various scenarious can be constructed, enabling the study of the behavior of the electrical energy supply and demand under different policies and parameter assumptions, such as peak load pricing and stringent regulation. Thus with the use of the model effective policies can be implemented early enough to prevent probable future crisis situations.