Energy Independence & Securities Act NEMA Premium® Efficiency EISA Energy Independence & Securities Act and NEMA Premium® Efficiency April 14, 2009 "These materials are intended to provide general information (not legal or other advice) about important new legislation or developments. These materials are not intended to substitute for a thorough analysis of the subject covered or any subsequent developments relating to that subject.“. © 2009 Regal Beloit Corporation. All rights reserved.

General Overview of Levels EISA Basics EISA (Public Law 110-140) was signed by President Bush on December 19, 2007 and will become effective on December 19, 2010. Beginning on December 19, 2010, motor manufacturers may not sell motors built after December 19, 2010 with a lower nameplate efficiency than EISA allows. EISA applies to both NEMA and IEC motors with features described in the details of the law. EISA allows motors that are considered “finished goods” or are shipped from the factory before December 19, 2010 to be sold after December 19, 2010. General Overview of Levels General Purpose NEMA & IEC motors that today need to meet EPAct efficiency, will need to meet the NEMA Premium® efficiency levels beginning on December 19, 2010 General Purpose NEMA & IEC motors that were exempt from EPAct because of voltage, mounting, etc. will need to meet EPAct efficiency beginning on December 19, 2010 NEMA & IEC motors that are not considered “General Purpose” (i.e., motors that cannot be used in most applications, such as special shafts, blowers or nonstandard frequencies, nonstandard volts/Hz) remain exempt from EISA regulations for efficiency. © 2009 Regal Beloit Corporation. All rights reserved.

© 2009 Regal Beloit Corporation. All rights reserved. Rebates On March 31, 2009, the U.S. Senate Energy and Natural Resources Committee adopted a provision that creates a motor rebate program for premium efficiency motors, known as a “crush for credit” program. This proposal is expected to pass the US House of Representatives and US Senate by Fall 2009. Rebates $25 per horsepower for the purchase of NEMA Premium motors Must demonstrate evidence that the user purchased an electric motor that meets the new requirements to replace an installed (existing) motor. $5 per horsepower for the disposal of the old inefficient motor Must demonstrate evidence that the entity removed the installed motor from service and properly disposed of the old motor and nameplate. It is intended to offset the cost of purchasing a new, more efficient motor and to encourage the purchase of higher efficiency motors instead of repairing older, less efficient motors. Details regarding acceptable “evidence” of purchase and disposal have not yet been defined. Timing Planned effective date no later than Jan 1st, 2010 and lasts for five years. © 2009 Regal Beloit Corporation. All rights reserved.

© 2009 Regal Beloit Corporation. All rights reserved. Specific EISA Rules Exempt / Not Covered Single phase Special shaft extensions TEBC, TEAO, DPFV, TENV Special V/Hz inverter motors Non-continuous duty Design D Phase converters Multi-speed 10 pole and higher pole counts 50Hz Two-digit frames (48, 56) Must meet EPACT (Table 12-11) Close Coupled Pump (JM, JP) Vertical Solid Shaft Round body 201-500hp Firepump motors U-frame 8 pole Design C Nonstandard Voltages, 0-206v, 254-413v, 507-600v Must meet NEMA Premium (Table 12-12) 1-200hp Design A & B C-face, D-flange Footed Voltages covered by EPACT: 207-253v and 414-506v 60Hz Note: NEMA frames and IEC equivalents are included in the categories above – use other features to determine efficiency level. © 2009 Regal Beloit Corporation. All rights reserved.

© 2009 Regal Beloit Corporation. All rights reserved. EISA Rules Summary Start © 2009 Regal Beloit Corporation. All rights reserved.

© 2009 Regal Beloit Corporation. All rights reserved. Examples of EISA Rules Example #1: Motor ABC is an EPACT motor (12-11) with rating 100hp 230/460v, 60Hz, 405T 1800rpm, TEFC, standard bracket, horizontal, rigid base. Beginning on December 19, 2010 it can no longer be sold because it is a General Purpose NE MA motor and will not meet the efficiency requirements under EISA. EISA requires that this model must meet NEMA Premium efficiency standards. Increasing the efficiency of this motor would require a design change. Example #2: Motor XYZ is the same as ABC except it has space heaters and a special 13.75” shaft extension. The special shaft extension makes motor XYZ exempt from the EISA requirements, therefore, it can continue to be purchased after December 19, 2010 without a design change or a substitute motor. © 2009 Regal Beloit Corporation. All rights reserved.

© 2009 Regal Beloit Corporation. All rights reserved. Why Should I Upgrade? If my older, less efficient motor fails, why should I upgrade an Exempt motor to NEMA Premium instead of rewinding the old motor? Higher efficiency motors: 1) Reduce the operating costs and less stress on utilities, supporting Green initiatives. 2) Generally operate at a lower temperature and for every 10°C reduction in operating temperature, insulation life doubles. 3) Are generally quieter (smaller fans). 4) Have lower vibration with lower bearing temperatures for longer bearing life. 5) Earn a rebate. Comparison of Operating Cost: Example: 100hp 1800rpm ODP motor Operating 24 hrs/day, 240 days/year at a cost of $0.08 per kW-hr Standard efficiency motor with 93% versus NEMA Premium motor with 95.4% Standard efficiency motor uses $36,963 worth of electricity per year to operate NEMA Premium motor uses $36,033 worth of electricity per year to operate In addition to direct energy cost savings, maintenance and downtime will be reduced. Over a 20 year life this is $18,600 © 2009 Regal Beloit Corporation. All rights reserved.

What can Marathon Electric do for Me? Our Sales and Engineering teams can help ensure compliance with the new EISA requirements and with your own internal energy initiatives: We will compile a list of the motors that you purchased in the last 12 months. We will help analyze the cost and benefits of upgrading each motor. Watch for updates to this presentation, to include a payback calculator. We will match those models to the new model number. For motors that do not yet have a new model with all of the same features, we will work with you to establish the new model. For special motors that will still be exempt under EISA, consider upgrading to save operating cost over the life of the motor. Some applications may have size, weight or performance constraints - - now is the time to consider these special conditions. Watch for other innovative solutions from your motor energy saver, Marathon Electric! © 2009 Regal Beloit Corporation. All rights reserved.

Worldwide Energy Standards NO LEGISLATION by IEC - - Voluntary Compliance 2/1518/FDIS document issued in Sept 2008 defines levels for IE1, IE2, IE3 IE4 is not defined but is reserved for Super Premium 50Hz IE1 is based upon EFF2, not a direct match IE2 is based upon EFF1, not a direct match IE3 is based upon 15% to 20% lower losses than IE2 NEMA Table 12-14 for 50Hz was revised in 2009 to match IE3 60Hz IE1 60Hz is equal to Brazil’s level IE2 60Hz is the same as EPACT IE3 60Hz is the same as NEMA Premium British Columbia, Canada will match EISA - - January 1, 2011 Natural Resources Canada (NRCan) proposed change for all of Canada. Expect decision after April 20, 2009. IE1 IE4 IE2 IE3 © 2009 Regal Beloit Corporation. All rights reserved.

© 2009 Regal Beloit Corporation. All rights reserved. Other Resources US Department of Energy: www.energy.gov Motor Decisions Matter: www.motorsmatter.org National Electrical Manufacturers Association: www.nema.org Alliance to Save Energy: www.ase.org Consortium for Energy Efficiency: www.cee1.org American Council for an Energy Efficient Economy www.aceee.org Marathon Electric: www.marathonelectric.com Regal Beloit Corporation www.regal-beloit.com © 2009 Regal Beloit Corporation. All rights reserved.

© 2009 Regal Beloit Corporation. All rights reserved. APPENDIX © 2009 Regal Beloit Corporation. All rights reserved.

© 2009 Regal Beloit Corporation. All rights reserved. NEMA MG1 Table 12-11 (EPACT) © 2009 Regal Beloit Corporation. All rights reserved.

NEMA MG1 Table 12-12 (NEMA Premium®) © 2009 Regal Beloit Corporation. All rights reserved.

NEMA MG1 Table 12-14 (NEMA Premium for 50Hz) 2008 © 2009 Regal Beloit Corporation. All rights reserved.

© 2009 Regal Beloit Corporation. All rights reserved. IEC: IE1 © 2009 Regal Beloit Corporation. All rights reserved.

© 2009 Regal Beloit Corporation. All rights reserved. IEC: IE2 © 2009 Regal Beloit Corporation. All rights reserved.

© 2009 Regal Beloit Corporation. All rights reserved. IEC: IE3 © 2009 Regal Beloit Corporation. All rights reserved.