Low-cost base-load generation has a strong operating track record, though it remains subject to energy margin variability. Large production volumes from the Marcellus and Utica shale gas regions and changing prices at the TETCO pricing hub carry significant downside potential for a generation portfolio that is largely nuclear (83% of total generation). A mild summer, declining market heat rates and gas basis differentials have weakened the economics of the company's generation plants despite an improving power outlook through much of 2014. Capacity prices may continue to languish because of lackluster electric demand, growing energy efficiency, and increased penetration of demand response initiatives. Exelon still operates a large nuclear fleet; though there have been operational issues with certain units in the
