Deregulating natural gas: Working through the maze

The President submitted to Congress a proposal to deregulate natural gas titled ''Natural Gas Consumer Regulatory Reform Amendments of 1983.'' These amendments to the existing NGPA were fashioned by Energy Secretary Donald Hodel. They call for a transition period from regulation to deregulation. A transition price cap will prevent rapid price increase, and protect consumers. An ''allowed rate'' mechanism will prevent automatic pass through of pipeline purchased gas cost if they exceed this rate. Under the proposed reform, residential prices will not increase above 10% of 1982 prices in real terms. Yet deregulation will allow the gas producing sector of the industry to be more responsive to supply and demand of the gas consumers.