Natural gas basis differential movements and Electric Reliability Council of Texas (ERCOT) fundamentals have the highest potential to erode wholesale margins and NRG Energy Inc.'s credit profile. Capacity prices have rebounded but could be adversely affected by slowing demand in most regions due to milder weather, or a secular decline from growing energy efficiency and demand response. Retail margins have counterbalanced wholesale decline to an extent. The company has scale and dispatch diversity. Large natural gas production volumes come from the Marcellus and Utica shale gas areas, which are a significant risk for NRG's (and legacy Edison Mission Energy's [EME]) PJM Interconnection market assets. Home Solar (residential solar) continues to be a drag on margins because of poor execution. Future
