* Concerns swirl about PJM statement on double counting
* Deutsche Bank lowered price target to $21 from $29
* EnerNOC COO Brady resigned
LOS ANGELES, Feb 11 Shares of EnerNOC Inc (ENOC.O) slid 14 percent to an 18-month low on concerns that the demand response company may have fattened revenues on the books and covered up some customers' failure to meet agreed-upon power-use reduction targets.
The concerns, highlighted in a Deutsche Bank client note on Friday, come a week after regional grid operator PJM issued a statement condemning curtailment service providers (CSPs) like EnerNOC for a practice known as double counting.
The statement did not name EnerNOC or any other company by name, and EnerNOC officials could not immediately be reached for comment.
EnerNOC also said in a filing to the U.S. Securities and Exchange Commission on Thursday that its Chief Operating Officer Darren Brady had agreed to resign.
Double counting is when a customer either records power savings under more than one demand-cutting program or reduces its electricity demand by more than originally forecast and uses that excess to offset a shortfall by other customers.
"The result is that the CSP is paid twice for a single load reduction, thus double counting the value of the compliance," the PJM statement said.
Demand response companies like EnerNOC help utilities and grid operators curb and control electricity demand by paying customers to reduce energy consumption during peak hours when power supplies are stretched.
EnerNOC, in turn, gets paid from utilities for managing a certain amount of capacity on their network and lowering the load on the electrical system.
Joseph Bowring of Monitoring Analytics, the market monitor for PJM, said the members of PJM were aware of the loophole in their system that allows the double counting, but that they had voted to defer action on the issue for nearly a year.
He declined to comment on whether EnerNOC was suspected of double counting on any power savings.
Companies like EnerNoc benefit when a customer hits its targets, which is why, according to PJM, some use surplus reductions on the part of one customer to make up for a shortfall in another.
PJM accounts for about 60 percent of EnerNOC's revenue.
Early on Friday, Deutsche Bank analyst Carter Shoop cut his price target on EnerNOC shares to $21 from $29, saying EnerNOC's potential involvement in double counting could hurt earnings. If the company was not involved, the company could benefit, Shoop added.
"If EnerNOC is involved in this 'market manipulation' we believe sales and/or margins could be impacted (there are several small customers that are not adequately shedding load today that EnerNOC would have to discontinue its relationship with or more aggressively incent to shed load)," Shoop wrote.
Deutsche Bank has a "hold" rating on EnerNOC shares.
The shares fell to an intra-day low of $20.31 on the Nasdaq before closing at $20.49.
PJM operates the power grid and energy market serving 51 million people in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. (Reporting by Nichola Groom and Matt Daily; editing by Bernard Orr, Gary Hill)