Tufts Financial GroupEnergy Sector Equity Presentation

Spring 2010

What we will cover

• Company Video

• EnerNOC’s core business

• Industry background

• News & current contracts

• Financials

• Competitor analysis

• Regulatory environment

• Risks

• Reasons to invest

• Placement within the Alpha Fund

• Valuation

EnerNOC’s energy management solutions

• DemandSMART• Utilities pay EnerNOC for preventing peaks in demand that exceed their supply

• EnerNOC pays large companies for temporarily curbing their energy usage (ex. turning down the lights or air conditioning)

• EnerNOC charges more to utilities than they pay to the companies

• SupplySMART• creates a market that allows transmission operators to compete for energy bids from

utility customers

• Utilities like this because it creates more market efficiencies and lower prices

• EnerNOC tells utility companies what customers want, so the utilities companies can buy accordingly.

EnerNOC’s energy management solutions

• SiteSMART

• provides end users with on-demand info about their facility’s energy and systems data, helping them to prioritize and implement energy savings recommendations

• customers pay EnerNOC a commission for this package

• CarbonSMART

• measuring, tracking, and management of greenhouse gas emissions across the enterprise

• helps companies comply with mandatory and voluntary carbon emissions reporting

Industry Background

• Classic model for providing electricity is through a government-regulated monopoly utility

• Increasing deregulated electricity markets (e.g.New England, now California)

• Electricity demand forecasted to rise 18% in the US over the next decade

• Capacity growth expected to be only 8%

• 10% of electric capacity is built for spikes in demand that occur less than 1% of the time

• Peak demand facilities becoming more expensive to construct and operate as oil and gas prices rise and availability of credit dries up

News & Current Contracts

• 4/14/10- State of Massachusetts awards ENOC part of $10 million contract

• 4/8/10- Mass Hi-tech council selects ENOC as its preferred energy management partner

• 3/17/10- State of Maine’s exec branch joins ENOC’s DemandSMART program

• Municipalities and States EnerNOC is contracted with:

• New Mexico, Connecticut, Rhode Island, Suffolk County, NY, the City of Boston, Maine, Massachusetts, Vermont, among others

• Utilities EnerNOC is contracted with:

• Southern California Edison, Tennessee Valley Authority, Pacific Gas & Electric

Financials

2009 2010 (E) 2011 (E)

EPS -0.32 0.32 0.82

Operating Income

-5.05 10.16 26.38

Revenue 190.68 264.07 326.69

ROE -4.69% 8.49% 5.65%

Net Income -6.83 11.94 25.58

EBITDA 7.00 27.38 45.24

5 yr CAGR (Revenue): 93.12%

4yr CAGR (EBITDA): 87.22%

Revenue Growth

Net Income Growth

Advantageous operating leverage

• “Most of the leverage is in operating expenses, which should grow less quickly than revenue. For example, headcount in the network operating center was 31 two years ago and 30 now despite a doubling of megawatts under management.”

• - Bank of America Report on EnerNOC (29th March 2010)

• Small increment in operating cost has a much larger increase in the revenue

Competitor Analysis2010 (Estimate)

ENOC COMV ITRIEPS 0.32 -0.32 -0.06Revenue 264.07 135.08 1687.45ROE 8.49% -4.55% 2.67%Net Income 11.94 -7.1 121.46P/B 4.789 4.47 2.06

2011 (Estimate)

ENOC COMV ITRIEPS 0.82 0.16 2.51Revenue 326.69 171.51 2138.89ROE 5.65% 6.96% 7.86%Net Income 25.58 5.25 157.66P/B 3.599 4.12 1.901

2009

ENOC COMV ITRIEPS -0.32 -1.45 -0.06Revenue 190.68 98.84 1687.4ROE -4.64% -44.69% -0.18%Net Income -6.83 -31.67 -2.25P/B 3.48 3.89 2.14

revenue and net income

expressed in millions of

dollars

Competitor Analysis

• Similarities

• All provide demand response services

• All focus on managing energy more efficiently in order to decrease costs for customers

• Differences

• Itron is a much larger, more diversified company which handles water management as well

• Comverge is smaller than EnerNOC and tends to follow EnerNOC’s market lead

Regulatory environment

• Recently, FERC (Federal Regulation and Oversight Committee for Energy) proposed a rule requiring full market price to be paid for energy that is reduced by demand response companies

• we view this as a signal that the economic importance of demand response technologies is becoming popular

• Formal requirements for resource adequacy filings are becoming more popular

• Carbon accounting with potential cap & trade system

Risks

• EnerNOC has not achieved a fiscal year of profitability as of today

• Industry subject to government regulation

• revenue affected by price in electric power markets, similar to commodities companies

• would suffer from termination of contracts

• large company (such as GE, Google, etc.) could create a similar business and eliminate EnerNOC’s first mover advantage

• loss of key personnel would damage operations

Reasons to Invest

• fast paced growth

• strong balance sheet

• first mover advantage

• strong operating leverage/scalability

• positive regulatory and cultural trends

• debt-ladened state and local gov’s looking to cut costs

• fantastic acquisition target

Placement in the Alpha Fund

• currently overweight or close to overweight in our Energy holdings (20% of our equity portfolio)

• current holdings include ExxonMobil (XOM), Transocean (RIG), Dominion (D), Kinder Morgan (KMR), Anadarko (APC), and BHP Billiton (BHP)

• riskier, smaller cap stock to gain exposure to cleantech/greentech

• smaller percentage of the portfolio to mitigate higher associated risk (2-3% versus traditional 4%)

Valuation• EV/Sales approach: target ratio of 3.3x

• corresponds to the stock’s historical mean and the average of both smart grid and high growth cleantech*

• 2011 expected revenues: $326.69 million*

• expected number of shares outstanding in 2011: roughly 24 million

• expected 2011 debt: ~$150 million*

• expected 2011 cash: ~$200 million*

• (2011 sales estimate * 3.3 ratio) = Enterprise Value

• EV = market cap + debt - cash

• 2011 expected EV= $1.078 billion

• 2011 expected market cap = $1.078 billion - $150 million + $200 million = $1.128 billion

• Market Cap = Price * Shares Outstanding

• 2011 Target Price = $47

• represents expected growth of roughly 28% annualized return

*estimates provided by Bank of America