J.P. Morgan Comments On ENOC Meeting

J.P. Morgan met with EnerNOC's ENOC President and IR manager in NYC yesterday.

“The overall tone was optimistic and the meetings coincided with a FERC ruling that management believes is a positive ‘landmark' ruling for the DR industry,” J.P. Morgan writes.

“The Federal Energy Regulatory Commission (FERC) issued a Final Rule stating that DR resources must be compensated at the market price of electricity when a DR resource has the capability to balance supply and demand as an alternative to generation resources and when dispatch of the DR resource is cost-effective,” J.P. Morgan writes.

“The rule goes against generation resources that believe that DR should be paid at a discount to generation. The rule is applicable to all domestic ISO's and RTO's and addresses the wholesale energy market (i.e. day-ahead or emergency DR), separate from the capacity market.

“Grid operators are required to determine thresholds for when DR is more cost-effective by July 22. We view the ruling as a solid endorsement by FERC of the DR industry. We believe the ruling should allow DR providers to deeper penetrate existing customers as well as open new markets that do not currently have capacity programs (e.g. Midwest ISO).”

EnerNOC closed Tuesday at $18.76.