For a number of years Power Management System (PMS) have been used to control islanded power systems. It can control system frequency and voltage as well as generated real and reactive power. The PMS would often have a load shedding facility to prevent the cascade failure of the generation system. The investigation is based on dynamics time domain simulations by DigSilent software and aims to define the main functions for the power management system (PMS) that will govern the operation of the power plant. In this paper, DigSilent Simulation Language (DSL) is used for simulation of Turbine-Governor and excitation system. Also DigSilent Program Language (DPL) is used to simulate action of PMS when it is required. Also, different dynamic contingencies related to Damavand power plant such as Trip of grid connection, Trip of One GT, Trip of load, Trip of Two GTs, Trip of Grid connection (According to governor logic, Automatic change mode acts, Solving frequency deviation by PMS) are considered. In each scenario, power plant stability is investigated and where required, PMS functions (such as load shedding and sending appropriate set points) are applied.