EnerNoc, the company that likes to claim it is the only smart grid startup to record a profit, goes into an earnings call later this week under a cloud.

The company's stock has slid to below $18 this morning because of concerns over a possible discrepancy between how it accounts for "negawatts" saved and how its biggest customer counts them.

PJM, the grid operator on the East Coast and EnerNoc's biggest source of revenue, tries to get end customers to reduce power through Peak Load Contribution (PLC) and Load Management (LM). PLC is essentially your five peak hours from the previous year. Industrial customers may hire consultants, but PLC is basically their homework assignment.

LM constitutes power reduction that can be accomplished by a demand response service. Power reduced through a PLC can't be added to the LM total. However, if the customer chooses a compliance metric that goes by the acronym GLD, the total reduced by the demand response provider can be seemingly exaggerated. In that situation, the demand response provider gets greater credit that it deserves. Rule changes may go into effect later this spring.

PJM has been monitoring the double accounting issue since last April.

For its part, EnerNoc says it played by the rules and that the accounting needs to be straightened out. If a third party curtailed power, it should be paid.

"The PJM statement does not question the fact that PJM receives a megawatt of actual load reduction for every megawatt it pays for through its mechanism of crediting CSPs (curtailment service providers or demand response providers), including EnerNOC. EnerNOC has long advocated for fair compensation for actual, verifiable load curtailment provided during grid emergencies, a position FERC has consistently and strongly endorsed."

The company also said COO Darren Brady resigned.

EnerNoc will announce year-end results on February 16. In the third quarter, it reported revenue of $162.8 million and net income of $43.9 million. It is expected to report a positive net income for 2010 as a whole. In the past 18 months, EnerNoc has gone on a buying spree -- it made its tenth acquisition in January -- to diversify its revenue.

Tags: comverge, demand response, energy efficiency, enernoc, grid, negawatts, pjm