This paper presents the major assumptions of the National Energy Modeling System (NEMS) used to generate the projections in the Annual Energy Outlook 20001 (AEO2000), including general features of the model structure, assumptions concerning energy markets, and the key input data and parameters that are most significant in formulating the model results. Detailed documentation of the modeling system is available in a series of documentation reports.2 A synopsis of NEMS, the model components, and the interrelationships of the modules is presented in The National Energy Modeling System: An Overview.3