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By Jeff St. John

Demand response leader EnerNOC (NASDAQ:ENOC) has reported lower-than-expected fourth-quarter revenues and announced the upcoming departure of its chief financial officer, amidst news that its long-running dispute with its main customer has just been resolved — but not to EnerNOC’s favor.

The combination of bad news drove down shares of the Boston-based company by as much as 10 percent in early Tuesday trading. EnerNOC reported a $28 million loss, or $1.08 per share, on revenues of $26.8 million for the fourth quarter of 2011. That’s compared to a loss of $21.2 million, or $0.86 per share, on revenues of $22.7 million in the fourth quarter of 2010. Analysts had predicted a fourth-quarter loss of $1.01 per share on revenue of $28.1 million.

EnerNOC also reported a fiscal year 2011 loss of $13.4 million, or $0.52 per basic and diluted share, compared to a profit of $9.6 million, or $0.37 per share, in the previous fiscal year. Also Tuesday, the company announced that CFO Timothy Weller will leave in March to pursue other professional opportunities. It’s the second C-suite departure since last February, when COO Darren Brady left the company.

But the biggest news came from the Federal Energy Regulatory Commission regarding a long-standing dispute EnerNOC has with grid operator PJM about how it claims revenues from its demand response programs. In February 2011, PJM accused EnerNOC of “double-counting” its customers' participation in certain demand response programs.

FERC initially sided with EnerNOC in a March ruling that ordered PJM to keep its existing market rules. But in November, FERC approved PJM’s proposal to change its demand response performance measures in a way that could hurt EnerNOC’s revenues. That did nothing to help EnerNOC’s battered share price, lthough FERC also ordered PJM to minimize the impact on existing demand response participants.

Late last Friday, however, FERC issued an order “substantially accepting PJM’s compliance filing, which resulted in the immediate implementation of PJM's proposed market rule changes regarding capacity compliance measurement and verification,” EnerNOC reported Tuesday. That means that EnerNOC will now have to start bidding at auction to cover megawatts that PJM considers “double-counted,” starting as early as Monday this week.

PJM has historically accounted for a majority of EnerNOC’s revenues. While the company has been expanding in the U.K., Australia and in other regions of North America, FERC’s decision could have a negative impact on the company’s revenues through 2012 and 2013, analysts say. Wedbush Securities reiterated its $5-per-share target for EnerNOC stock on Tuesday, citing the impact that FERC’s new ruling could have on PJM revenues.

Not all observers saw FERC’s ruling as all bad. Piper Jaffray maintained its $13 target price on EnerNOC stock, saying it removes an “overhang” that’s been driving company shares to multi-year lows throughout 2011. EnerNOC shares traded in the $40-to $50 range throughout 2008 and had hovered in the $25-to-$30 range throughout 2010, but have since fallen to languish in the $10 range for the past five months.

EnerNOC projected 2012 revenue to be in the range of $240 million to $280 million, with GAAP net loss in the range of $1.00 to $1.60 per basic and diluted share. For 2013, EnerNOC projected revenue in the $350 million to $400 million range, with the potential for anything from a net loss of $0.25 per basic and diluted share to a net income of $0.50 per diluted share, on the assumption that shares outstanding would increase from 26.7 million to 27.5 million.

EnerNOC is the biggest publicly traded demand response provider in the U.S., where it competes with the likes of Comverge (NASDAQ:COMV), Constellation Energy (NYSE:CEG), Honeywell (NYSE:HON) and ECS. But it’s also been growing energy efficiency, building energy management and power procurement business lines. It’s also acquired a dozen companies over the past several years.

In 2011 it bought Australia and New Zealand demand response provider Energy Response for $27.9 million, added 150 megawatts of automated demand response for Alberta, Canada’s grid operator, launched fast demand response in Texas and the U.K., and continued work on a DOE-funded, wind power-balancing project with the Bonneville Power Administration.

Source: EnerNOC Misses Q4 Estimates, Loses 'Double-Counting' Dispute With PJM