SCENARIO-BASED FINANCIAL PLANNING: A NEW TOOL FOR UTILITY MANAGERS

The Goleta Sanitary District has developed a financial model of its operations that takes into account all important aspects of its cost structure, both operating and capital, and of its operating environment. This Financial Planning Model (FPM) allows management to immediately analyze the effects of decisions on customer rates and other key outputs over the subsequent twenty years.The FPM helps management make sound operational decisions and communicates the effects of these decisions clearly to the Board of Directors and other stakeholders.This paper describes the functionality of the FPM and explains how it integrates with the utility's business processes. It will be of interest to General Managers, CFOs, and others with an interest in utility management systems.