Additional information concerning these factors is contained in EnerNOC's filings with the SEC, including our Annual Report on Form 10-K and quarterly reports on Form 10-Q, available at www.sec.gov. The forward-looking statements included in this call represent the Company's views on August 07, 2012. EnerNOC disclaims any obligation to update these statements to reflect future events or circumstances.During this call, we will refer to non-GAAP financial measures, including non-GAAP net loss per share, non-GAAP earnings per share, free cash flow and adjusted EBITDA. These financial measures are non-GAAP financial measures that are not prepared in accordance with generally accepted accounting principles. A definition of reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure is available in the press release announcing our second quarter financial results. The press release is available on the Investors section and on our website at www.enernoc.com. And with that, I will now turn the call over to Tim Healy. Tim Healy Thanks, Jen, and thank you to everyone for joining us this afternoon on our second quarter 2012 conference call. In today’s prepared remarks, I’ll spend a few minutes discussing our second quarter performance and how we believe it positions us to maximize customer and shareholder value in 2012 and beyond. David Brewster will then provide color on our current and emerging market opportunities and some important regulatory developments. Finally, Kevin Bligh will discuss our Q2 financial results and provide an overview of a number of key business metrics in details on our updated financial outlook including our increased guidance for 2012 and 2013. First, visibility of our top line growth increased during the quarter. In PJM’s recent base residual auction for the 2015, 2016 delivery year, we were successful in strengthening our leadership position in the mid-Atlantic by securing more than $300 million in expected future revenue. To put that into perspective, our expected PJM revenue for the 2015, 2016 delivery year is more than the total amount of revenue that EnerNOC expect to recognize this year across all of our products and markets combined.
Importantly, our growth in PJM is driven not just by more megawatts for us to manage, but by strong upward pricing trends that we see in the megawatt weighted system wide clearing prices of PJM capacity over the next four years. Specifically the megawatt weighted price of roughly 87% a megawatt day in 2012, 2013 which is the low point of clearing prices during this period, increases to $123 million a megawatt day in 2013, 2014, and $232 a megawatt day in 2014, 2015. And finally, $156 megawatt day in 2015, 2016, this represents a 79% price increase between 2012 and 2015.We are obviously pleased with aggregated asset base that is successfully locked in that type of pricing uplift. We are also pleased that we continue to increase our operational leverage by reducing the cost of managing each new megawatt as the company continues to scale. Specifically, as of June 30, 2012, our megawatts under management per full time demand response employee, has increased to 19.2 versus 18.0 at the end of Q1. So while the fees were set to collect for managing megawatts in PJM are about to increase in our favor. Our cost of managing those megawatts has been decreasing steadily. Lastly, our customer splits continue to translate favorably. In fact, customer splits for new customers are higher in Q2 this year than in Q2 last year, bolstering our forecast of gross margins for the year being roughly in line with last year and increasing slightly higher in 2013. Read the rest of this transcript for free on seekingalpha.com