APPLICATION OF SYSTEMS DYNAMICS IN LONG-TERM FINANCIAL PLANNING IN POWER TRANSMISSION UTILITIES

SUMMARY The influence of independent brokers, the dynamics of environment’s change introduced by globalization and human limitations in processing information, results in complex organizational decision making. Modeling and computer simulation allows representing the behavior of a system along the time, under the influence of exogenous variables and the processing of large amount of information to guide decision-making within an organization. ISA's transmission business has developed a simulation tool by applying a System Dynamics methodology. This tool supports the evaluation of possible evolution of the conditions in the economics, the electrical sector and the internal organization. This evaluation was developed to measure the financial impact for the long term management decision, i.e. identifying new business opportunities, entrepreneurship for new Investments for retrofitting the current system, new service development or expenses optimization. Three models were developed: the behavior of the national economy, the Colombian electricity sector and the company's finances. A set of variables within each of these models allows the dynamic simulation of probable evolution scenarios, which model the company’s financial situation in the long term. This tool allows to simulate the income results, cash flow, balance sheet and financial indicators, which result from taking decisions in the analyzed scenarios.