Merchant markets are likely to stay strong in the medium term; basic generation service (BGS) auction results have been strong for the past three years; Market fundamentals are strong in the medium term; the PJM region's reliability pricing model (RPM) capacity auctions results indicate declining reserve margins and increasing value for capacity; That a large portion of gross margin is under contract for next the few years provides some stability to cash flow generation; and The current high level of electricity prices in the PJM provides adequate cash flow. Exposure to market price volatility as contracts expire and they must be renewed at prevailing market prices; Current contracts place load-following, volume, and price risk on the comapny; and The proposed
