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Natural Resources Canada - C802 update

NRC has since amended the regulation to eliminate the "loopholes", harmonized it with CSA      C-802 standards and obtained Federal Cabinet Approval. The revised regulation was published in the Canada Gazette on May 6th for a 75 day public comment period and is expected to be Published and Registered for immediate implementation soon after. NRC expects the revised regulation to come into full effect during late August or Early September 2006.

The implication of the revised regulations can be summarized as follows.

· Effects dry type transformers manufactured in or imported into Canada as of the date of coming into full effect. Existing inventory can be sold.

· Applies to 3-phase and 1-phase 60HZ with primary voltages of 35kv or below and regardless of secondary voltage (rated 15 to 833kVA for 1-phase and 15 to 7500kVA for 3-phase units).

· Exemptions from above are auto, instrument, rectifier and converter, non-ventilated, testing, furnace, welding and rewound or rebuilt dry type transformers.

· Must bear a verification mark from a certifying organization. i.e. CSA

REX Power Magnetics has been fully prepared to produce these higher efficiency units with optimized designs, higher grade silicon steel and specialized core cutting equipment. In fact REX has produced these units for the past 3 years. REX high efficiency units are approved to carry the "Energy Star" label and the required CSA certification mark.

With the recent dramatic increases in the cost of copper and grain oriented silicon steel, manufacturers with optimized designs and specialized core cutting equipment will be the only ones able to offer quality and value at competitive prices.

Starting in July, our responses to requests for quotations for units likely to be produced in the fall of 2006, will also be offered as C802 compliant. All open orders that are not scheduled to be built prior to this date are also subject for review and price adjustment.

For further information do not hesitate to contact the REX Inside Sales Team.

REX Power Magnetics