Market-ordering devices from a gas distributor's viewpoint

Natural gas distributors have a large stake in the potential upcoming modifications to the 1978 Natural Gas Policy Act. The market ordering proposals now under consideration in the US Congress could have calamitous consequences for the distribution segment of the gas industry. Accordingly, distributors must thoughtfully assess such proposals and make constructive suggestions to ease the transition to higher natural gas prices. A discussion of several market-ordering concepts - including (1) allowing market-kickout provisions for distributors in pipeline service agreements, (2) making pipelines common carrier and letting distributors negotiate directly with producers, and (3) making pipeline customers third-party beneficiaries of the pipelines' supply contracts with producers - concludes that proper pipeline rate design at the federal level offers the best hope for the continued health of the gas industry and represents its surest approach to avoiding legislatively mandated market-ordering.