112Smart meter company Comverge, one of the leading demand response firms competing with EnerNOC and CPower, reported a narrow $9.1 million loss for the second quarter ended June 30. But the company is optimistic about the results, citing a 39 percent increase in revenue since last year to $13.3 million.

The company, based in East Hanover, N.J., lost $9.6 million in the second quarter in 2008, but that was before the downturn. The fact that it was able to slim this margin in such tight economic times puts the company right on track, management says. This can-do attitude is also buttressed by an increase in contract revenue from $4.3 million to $20.2 million in the last year.

These contracts are the major distinguishing factor between Comverge and its rivals. While the others work primarily with commercial clients to reduce energy when utilities are stretched, Comverge’s customers are primarily residential. While it does have some commercial and industrial clients, its new strategy focuses squarely on home service, utilizing data from smart meters.

To execute on this plan, the company is forging partnerships with utilities that serve residential markets like Pepco and Dominion Power in Virginia. Both companies are looking to roll out thousands of smart meters in the next few years, particularly if they are named recipients of stimulus grants from the U.S. Department of Energy.

Comverge’s most formidable competitor, public EnerNOC, reported a $10.4 million loss for the second quarter earlier this month. But its revenue is $42.4 million, and it manages more power than Comverge (3,150 megawatts versus 2,794).

So yes, it technically is still behind when you look at the numbers. But the real story here is that both companies beat analyst expectations in the last quarter — a seeming victory for demand response in its salad days. The idea of balancing energy load across the grid by paying energy consumers to turn electronics off during peak periods is relatively new and is only starting to gain visibility and traction. With both Comverge and EnerNOC tracking to beat their 2009 goals, it looks like the broader demand response business is following suit.