After the Islamic Revolution in 1979, Iran had to face another challenge: the war against Iraq. This challenge forced the government to help people by granting subsidy to essential goods such as bread, drugs and different kinds of energy - especially electric power which is one of the major industries in every country. This policy helped people have an easier life during the war, but as the famous law of supply – demand tells us, the lower the price of any good, the higher demand for that good is predicted and this low price of energy made Iran one of the most and worst energy consumers in the world. This high rate of consumption will cause lots of problems such as lack of electricity and financial pressure on the government. In this paper, a system dynamics model is developed to simulate the situations of Iran’s electric power industry since 15 years ago, assuming the effect of people’s pressure on the government and the pressure of the government to decrease subsidy. The main model is built on two positive and negative loops and the results are compared with the real statistics. Then, two policies are applied to the model: education and increasing the price.