Strong basic generation service (BGS) auction results for the past five years; Robust capacity pricing in Eastern Mid-Atlantic Area Council/PSEG North zone, despite weakness elsewhere in the pool; and Large portion of expected gross margin is under contract through 2013. Increased shale production has depressed natural gas and power prices; Exposure to market price volatility as contracts expire and are renewed at prevailing market prices; Nuclear costs will likely rise as a result of more stringent safety requirements, especially relating to spent fuel rods; The basis differential between PJM west and PJM east, which has declined from about $9-$10 per MWh to the current $5 per MWh, could erode further; and Meaningful open generation volumes from 2014. Standard&Poor's
