Modeling Natural Gas Regulatory Proposals Using the Project Independence Evaluation System

During the 1978 debates on the Natural Gas Pricing Act, Senator Henry M. Jackson of Washington, then Chairman of the Committee on Energy and Natural Resources, requested an analysis of the impact of the proposed legislation. A generic methodology was developed to represent alternative (average cost) regulatory proposals within the (marginal cost) framework of an economic equilibrium using the collection of models then known as the Project Independence Evaluation System. The results precipitated a controversy over the letter and intent of the competing legislative proposals.