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* Says in full compliance with PJM rules
* Says 'fully deserving of all payments'
* Says COO departure unrelated to PJM statement
* Stock down more more than 6 pct, extends Friday selloff (Adds EnerNOC statements, analyst comments, bylines, background, updates share activity)
By Matt Daily and Nichola Groom
NEW YORK/LOS ANGELES, Feb 14 (Reuters) - Electricity demand-response company EnerNOC Inc (ENOC.O) sought to dispel concerns it had wrongly booked power savings, saying it was "fully deserving of all payments" for its services, but its shares extended their losses on Monday.
The company also said the abrupt departure of Chief Operating Officer Darren Brady last week was unrelated to a statement by grid operator PJM that accused companies of double counting their power savings.
"Darren Brady's departure was not in any way related to the PJM statement," spokesman Brian Bowen said in an email.
EnerNOC's stock was down more than 6 percent in early afternoon trading after having traded down as much as 18.8 percent earlier in the day.
The shares have lost more than 20 percent of their value since Thursday, when EnerNOC announced Brady's departure.
The executive's resignation added to concerns that EnerNOC may have fattened its revenues by double counting some power savings and covered up some customers' failure to meet agreed-upon power-use reduction targets.
Boston-based EnerNOC works with power grid operators, utilities and large electricity consumers to reduce power consumption during expensive peak hours, reducing energy costs and alleviating pressure on the electricity grid.
At issue is the method for measuring the power savings in the PJM regional wholesale power market, which stretches across 13 states from Illinois to New Jersey and includes the District of Columbia.
A report issued by PJM and market overseer Monitoring Analytics on Feb. 4 said companies that were double counting their savings "are engaging in market manipulation that results in overpayment for curtailments and may ultimately jeopardize reliability."
Neither PJM nor Monitoring Analytics would name any of the companies suspected of double-counting.
"EnerNOC is in full compliance with PJM market rules. These rules are approved and supported by FERC (the Federal Energy Regulatory Commission), by law, and FERC approval is required to change them," the company said in a statement Monday morning. "EnerNOC is fully deserving of all payments received for its participation in PJM."
The double counting issue is not banned under current PJM rules, although the transmission group has said it planned to change the regulation in May.
Depending on how the rules are modified, EnerNOC could see 2011 revenues decline, according to Deutsche Bank analyst Carter Shoop, since double counting may make up 15 to 40 percent of the market.
The issue, however, is unlikely to have an impact on consumer electricity prices.
EnerNOC said in a U.S. Securities and Exchange Commission filing last week that Brady had agreed to resign on Feb. 5. That was the day following the PJM statement highlighting concerns about double counting.
EnerNOC did not give a reason for the resignation, and Brady will continue to serve as senior operations adviser to Chief Executive Tim Healy for an unspecified period.
According to the filing, Brady will receive severance, a lump sum of $200,000 and a monthly payment of $25,000 for each month he serves as an adviser to Healy.
"We do not know if EnerNOC is involved yet but the timing of the COO resignation has some investors questioning if they could be related," Capstone Investments analyst Carter Driscoll said in a client note.
Shares of EnerNOC were down 6.5 percent at $19.16 on Nasdaq.
Credit Suisse downgraded the stock to "neutral" from "outperform," citing concerns about potential rule changes in PJM and Brady's resignation.
Jefferies & Co, meanwhile, issued a note saying the severity of the stock selloff was unwarranted. (Reporting by Matt Daily and Nichola Groom, editing by Dave Zimmerman)