Just clarifying, since I think I've got my details wrong. I would propose that yesterday's drop is the result of Credit Suisse, while today's drop is the result of the S-8. The new S-8 adds potentially 2 mil new shares, after adding 2.5 mil potential shares a year ago (of which only net 500K have gone into circulation). Does this become a yearly occurrence? Sure seems that way...
I see it as an opportunity for DR, but not necessarily EnerNOC. On Point had a show earlier this year about solar ("search for Big Solar And Renewable Energy In The Age Of Fracking") that talked about homeowners leasing solar panels from companies like Solarcity. They are already looking at DR as a business opportunity (similar to Google with Nest, they have a relationship and infrastructure in the home). I don't think EnerNOC can or will compete in the retail market (was Comverse the company that tried and failed here?)
As supply grows and diversity grows, we will likely see lower prices ahead for DR. EnerNOC's management likely sees it too, which is why they've been so keen on diversifying recently. If people believed DR was a sustainable, defensible business, EnerNOC would have been bought out long ago.
Disclosure: long here for a trade.
How incredibly shocking. They were calling for $3 if I remember right a quarter or two ago.
Wonder why they've always had a bug up their --- about ENOC
If you google the heading for this post you will get an article at Greentech Media discussing FERC's order 745 and economic demand response. Author feels that the court ruling FERC had gone to far will be irrelevant in time. Here is an part of the article.
"Beyond economic demand response
Although this is a setback, the fight over Order 745 certainly is not over. A FERC spokeswoman said in an email that the agency is considering its next steps. Even if the ruling stands, however, it may not slow down the role demand response plays in energy markets, such as PJM.
In a statement, EnerNOC, the largest demand response provider in the U.S, noted that economic demand response, which is what is covered under FERC Order 745, makes up only 2 percent of its revenue.
The bulk of demand response in PJM Interconnection, the country’s largest energy market, is in the capacity market. That too is shifting, but not because of lawsuits.
On Friday, PJM announced the clearing for its most recent capacity auction. The role of demand response is similar to what it has been in recent years, with more than 10,000 megawatts procured. What has changed is that more demand response is being procured year-round, rather than just for summer-only programs. Demand response is becoming an increasingly important resource in all seasons."
Contracts are structured based on what they refer to as 'splits' (Basically shared percentage of revenue received from DR programs). Using basic math - lasts years' clearing price was $59 and it jumped up to $120 this year so doubling. Assuming they secured the same amount of DR as last year (about 4 GW), we should see about $280 Million in revenues announced come Tuesday morning. The drop-off in DR amounts in this year's auction I find interesting. I suspect this is due to consolidation in the industry and small time players not being able to compete with the big boys anymore as well as the increased regulatory scrutiny and requirements for DR. Unsure what the impact of the court ruling on FERC exactly means - its clearly not good for DR and DR aggregators but I believe this story broke during the day while the markets were open so market reaction appears to already have been baked in at this point.
Sentiment: Strong Buy
No new information between the PJM press release and the Credit Suisse report yesterday. Fundamentals? Yeah, whatever. Let's try technicals: A bit of support at 17 and then more support around 16.
Dilution is killing this company. Cash-flow positive and yet management is taking all the gains (and spending on acquisitions as they look for a new golden goose). We are entering a lower-growth area. Management should consider some sort of divi, but it ain't gonna happen.
well considering the FERC Order 745 I agree that the uncertainty isn't good, but from what the company issued the financial impact should not exceed 2% of sales 3years backward which IMHO is not so bad. but i digress.
well maybe it would be worthy to mention that the company bought back 606k shares by 4Q13 after they initiated share repurchase program in august 2013. which i think is not bad for a company of this size.
i saw the votes and I agree that the "nay" have been significant, but if they perform well which so far has been the case. let them earn the money. but i believe similar stock options plans are standard in other companies as well.
Geeeeee. People just want to make a little money when they work so hard. I wish I worked for them and could get some more shares.
Is it the death knell for both Demand Response and the traditional utility?
Rocky Mountain Institute is saying that solar + storage is already at parity cost with fossil fuels in Hawaii, one of the (the) highest energy markets. They're saying that "10's of millions of American homes and businesses will have access to solar + storage at parity cost by 2024."
That's only 10 years out, so it's happening between now and then. Enernoc's got a huge infrastructure built around demand response. I guess if it can become an energy management company, software company, etc -- then it's not as dependent upon DR.
But this seems to me like the "pivot" I just watched in the last episode of "Silicon Valley" on HBO.
Technology is moving so fast, that even Enernoc's leadership may soon be outmoded, as its defining Category becomes obsolete for an increasingly distributed grid.
No one's immune to this with the rate of technology growth in this era. Not even Twitter, who I've always maintained is a platform, not a technology, and therefore subject to both faddism and encroachment. That's the basis of the management turmoil they're having. You'll see.
But back to topic, I wonder if Demand response is in trouble. As the load on utilities decreases with homes and businesses going offline, or offering storage and CAPACITY to the grid, will Enernoc's DR relevance fade?
I have no position currently and this is nothing to do with a trade. Longer term issues, but ones that should be confronted, at least somewhat, in the upcoming earnings conference, imo.
Looking closely, management granted themselves (and employees) 1.5 mil shares during 2013, and then voted to repurchase 1 mil shares. So essentially they transferred from company coffers into their own pockets, with shareholder approval.
That 1.5 mil shares represents over 5% of the value of the company. That's a lot of dilution for a company no longer a startup.
Hello please could you specify which credit suisse report do you mean? and which dilution should be impacting the company? Also would you be so kind to elaborate on the management taking all the gains. it seems to me that brewster or healy still have quite significant holdings in the company. thank you for the answers. regards and good luck to you!
Got to start getting back into the goings on, ruling, auction, what's happening.
Have to be also careful about market conditions, with the big drop past two days, and not knowing if more is coming.
Wondering if any new info out there anyone has to share in terms of DR prospects generally, ENOC specifically. Will search news over next few days, wondering about Japan in particular.
And of course, more regulatory uncertainty. From the PJM Press Release:
*PJM is evaluating a May 23 appeals court ruling vacating FERC Order 745 in its entirety. This ruling could affect how demand response resources are able to participate in PJM's markets in the future. Since the court has not issued a mandate requiring FERC to take action pending appeal of its ruling, there are no immediate impacts on the current base residual auction results.
Thank you Stacker and Lesserfool for the PJM heads up. Sold today at 18.40 something for a small loss. Don't want to be holding for auction results tomorrow. Does anyone know expectations, and where posted first?
Overall, supply is down, prices are up. Not so bad, right? Some excerpts:
A total of 10,975 MW of demand response was procured -- a decrease of about 1,433 MW from last year's auction. However, there was a significant shift to the types of demand resources that have more flexibility and a greater contribution to reliability. There were 1,401 MW more "annual" and 4,693 MW "extended summer" demand resources clearing in this auction than last year, while the amount of "summer-only" demand resources declined by 7,527MW since last year.
The total quantity of demand resources offered into the 2017/2018 BRA was 11,293.7 MW (UCAP), representing a decrease of 22.2% over the demand resources that offered into the 2016/2017 BRA. Of the 11,293.7 MW of total demand response that offered in this auction, 10,974.8
MW cleared and will be awarded capacity payments. The cleared demand response is 1,433.3 MW less than that which cleared in the 2016/2017
BRA representing an 11.6 % decrease. Of this change, 1,073.1 fewer MWs of DR cleared in the MAA C LDA and 360.2 fewer MWs of DR cleared outside of the MAAC LDA. Table 3A contains a comparison of the Demand Resources Offered and Cleared in 2016/2017 BRA & 2017/2018 BRA represented in UCAP.
The RCP for Limited DR, Extended Summer DR and Annual Resources located throughout the RTO except for the PSEG LDA and the PPL LDA is $106.02/MW-day, $120.00/MW-day and $120.00/MW-day, respectively. In the PSEG LDA, the RCP for Limited DR, Ex tended Summer DR and Annual Resources is $201.02/MW-day, $215.00/MW-day and $215.00/MW-day, respectively. In the PPL LDA, the RCP for Limited DR, Extended Summer DR and Annual Resources is $40.00/MW-day, $53.98/MW-day and $120/MW-day, respectively.
I don't know that they mean - but they are:
Prices double last year, but
Demand response down -12% from 12,408 MW to 10,975 MW.
Google PJM Capacity Auction Results - came out around 5:10 pm
Not sure about the timing of the release. Here's a replay of last year's prices. (guessing it's after the close, although maybe there was a downgrade on Monday morning?)
Date Open Close
May-24-2013 17.69 17.84
May-28-2013 16.40 15.01
I too tried to sell today but only got filled on half my order. Hopefully tomorrow presents another opportunity.