Developed with Tampa Electric Company,
Dynex Capital and E Seal
Challenge: Tampa Electric Company (TECO) wanted to encourage customers to install
energy-efficient heating and cooling systems and related improvements. They have a rebate
program but wanted to offer their customers an additional, more cost-effective incentive.
As a new E Seal participating utility, TECO gave strong consideration to the E Seal
Loan Program offered through Dynex Capital, Inc. with Viewtech. Dynex is a New York
Stock Exchange company with $4 billion in assets. Dynex is teaming with Viewtech to offer
residential financing programs for energy utilities, equipment manufacturers and
distributors nationwide. They are the first national EPA Energy Star Financing provider.
After extensive review of other finance options, TECO chose the E Seal program because
it offered a low-cost method to offer residential financing with the utility's brand name
but no bad-debt risk. The E Seal loan program offers a turnkey program with loan
origination and servicing performed from a national processing center administered by
Viewtech in Richmond, VA. The $10,000 program start-up fee is completely refundable after
$1 million in loans are issued.
Process: TECO signed a letter of agreement with Dynex, paid the $10,000 fee and
provided Viewtech with a list of authorized equipment to be financed as well as approved
contractors. Viewtech customized the loan applications and other materials with TECO's
"Comfort Loan" brand name. To announce the program, TECO distributed a bill
insert and program flyer, and presented contractor kick-off meetings to explain the
Qualified TECO customers may borrow up to $25,000 for up to 15 years to install
high-efficiency heat pumps. Customer may finance up to 100% of the installed cost,
including the cost of related improvements such as insulation, duct improvements and water
heaters. Program features include quick loan approval and below-market fixed interest
rates. To apply for a loan, customers can receive an application from TECO, authorized
contractors or Viewtech. Customers may even get credit pre-approval by calling the
programs' toll-free phone number. Customers who apply for a Comfort Loan may still qualify
to receive equipment rebates of up to $750.
On April 15, 1996, the first Comfort Loan application was faxed to the Richmond office.
Viewtech receives applications from contractors and customers by fax or mail. Viewtech
staff review the energy efficiency improvements proposed and the contractor's bid estimate
to ensure they meet program standards, then Viewtech performs a national credit bureau
agency check on the customer. Upon receipt of a completed application, Viewtech notifies
the borrower of loan approval by phone the same day, usually within 30 minutes. Viewtech
also pre-approves customer eligibility by phone based on their credit. Once a loan is
approved, Viewtech mails the customer all the necessary finance documents within one
business day. Upon completion of the installation, the customer or contractor returns the
signed finance agreement and contractor invoice to Viewtech and mails a check made payable
to the contractor and/or borrower within one week. A payment coupon booklet is sent to the
TECO receives weekly status reports of all customer applications received and loans
funded along with other important market data that is collected during the loan process.
TECO performs random inspections to ensure quality installations.
Result: In first three months of the Comfort Loan program, Viewtech approved
over 200 loans totaling over $500,000. As agreed, Dynex issued a $5,000 start-up fee
rebate check to TECO in August.
TECO's goal is to approve over 500 loans for over $2 million for the Program through
1997. Based on the program's success, TECO is expanding the number of contractors
authorized to offer loans.
Using Viewtech as a financing partner with over 20 years of energy efficiency
experience, Tampa Electric is able to use Dynex Capital's funds to influence the home
improvement market. The E Seal Loan program is available to all electric utilities