Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of demand response company EnerNOC, (ENOC) jumped 10% today after announcing a major auction win.
So what: EnerNOC cleared $185 million in capacity payments for 4 GW of capacity at JPM for 2017/2018. These payments will then be used to compensate capacity partners who adjust energy usage as part of EnerNOC's network.
Now what: PJM is a major revenue source for EnerNOC, so this is a long-term win for the company and gives some revenue stability going forward. Earnings will still be volatile, though, and I'm concerned that the competitive advantage over utilities doing the same thing and even backup power storage isn't terribly strong. While I see this as an incremental positive for EnerNOC, I don't see it as a reason to buy, so I'll sit out the move today.
