Another energy efficiency expert jumps in IPO

EnerNoc raise its IPO price, and investors still lap it up.

EnerNoc, which sells systems that automatically curb power consumption in buildings, saw its stock jump 20 percent on Friday, a day after its initial public offering.

EnerNoc sold 3.75 million shares for $26 a share in its IPO. The shares started trading on the open market on Friday and closed at $31.13. The $26 price was higher than expected. The company initially said it would sell its stock for $21 to $23 a share and then raised the range to $23 to $25 a share.

The company monitors electrical consumption in commercial buildings and matches that against electrical production at power plants. As the price of electricity rises, EnerNoc tries to lower demand by turning down pool heaters or air conditioners. Ideally, consumers won't notice the temperature changes, but power plants will be spared the necessity of building "peaker" plants for extremely warm days. This excess capacity doesn't get used much, and it is expensive; however, utilities need to have it to avoid brownouts or high rates on hot days. Approximately 5 percent of the electrical grid is actually only used about 50 hours a year, according to utility Pacific Gas & Electric.

"Because we estimate that over 10 percent of this supply-side infrastructure is typically built to meet peaks in demand that occur, demand response solutions have the potential to offset $5.9 billion per year in projected infrastructure expenditures in the United States and Canada," EnerNoc wrote in its filing with regulatory agencies.

EnerNoc has seen revenue rise from $800,000 in 2004 to $26.1 million in 2006. The company managed 137 megawatts of electrical capacity by the end of 2005 and now manages 545 megawatts. (A megawatt can serve the electrical needs of about 300 homes.) It operates in 20 states in the U.S.

Comverge, which provides a similar service for homes, went public for $18 a share in April. The company's stock now sells for around $24.

 

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