U.S. power producer Exelon Generation Co. LLC's (ExGen) low-cost base-load generation has a strong operating track record, but it remains subject to considerable energy margin variability, driven by unpredictable commodity prices, demand growth, and weather patterns. Large natural gas production volumes have collapsed natural gas and power prices, carrying significant downside potential for a portfolio of power plants that is largely nuclear (more than 60% of total generation). A mild summer in 2015, declining market heat rates, and gas regional pricing differentials have weakened the economics of the company's generation plants in the next 18 months despite a stronger fundamental long-term outlook. Capacity prices could continue to languish because of lackluster electric demand, growing energy efficiency, and increased penetration of
