The Transformer Informer VOL. 1 ISSUE 6 PUBLISHED MONTHLY FOR THE EMPLOYEES OF WAUKESHA ELECTRIC SYSTEMS JUNE, 2008

In This Issue

Cover Story:

FR3 provides

“Green Option”

for customers

Enhanced Product

Development

Program

Launched

p. 2

The Waukesha

Experience in

Action

p. 3

Waukesha Service

Installs Phase

Shifter

p. 4

Scrap Metal

becoming

money-maker for

Waukesha

p. 5

Benefits Updatesp. 6

News Worth

Noting:

Employees

Making News

Around the

Business

p. 7

Customers are increasingly substituting Envirotemp®

FR3, an oil derived from soybeans rather than traditional

mineral oil to cool and insulate transformers. Not only is

the plant-based variant more environmentally friendly,

it also provides superior performance characteristics

compared to mineral oil.

What are some Waukesha transformers currently being filled and retrofilled with? Here’s a hint: It is derived from a plant often used in the production of machine oil, edible oil, printer's ink, pressed imitation food (beef, crab, pepperoni, etc.), flour, grits, and stock feed. That’s right, the lowly soybean has made its way from tofu to the inside of transformers! Envirotemp® FR3® fluid, manufactured by Cooper Power Systems, is a natural ester-based fluid formulated from a renewable natural resource—soybeans. The food grade base oil is mixed with performance enhancing additives to produce an innovative fluid that is both remarkably fire-resistant and environmentally friendly. According to Steve Moore, Waukesha’s LTC & Natural Ester Fluids Product Manager, FR3 fluid is about 95% vegetable oil. FR3 fluid may sound new, but it has been in commercial service for over 10 years. Cooper Power Systems started development on Envirotemp FR3 fluid in 1991. In 1997, Cooper began field trials in the U.S., and commercially released the product in 1999. According to Cooper Power Systems’ Vice President, Steve Benna, “With demand for Envirotemp FR3 fluid growing both in the U.S. and international electrical distribution markets, we knew that we needed an alliance in the medium and large power transformer business to accelerate the acceptance and use of FR3 fluid in that market”. In 2003, after evaluating several manufacturers, Cooper formed an alliance with Waukesha Electric Systems. “The first applications of FR3 for Waukesha customers were in the retrofill market for fire insurance reasons. FR3 fluid retrofill was chosen by several customers as a more economical means of reducing

fire hazards than installing expensive deluge systems or fire walls,” said Moore. Retrofilling (the removing of mineral oil and replacing it with FR3 fluid) is done at the utility site and normally takes a few days. Waukesha’s ongoing commitment to bring the many benefits of natural ester fluids to the medium and large power markets does not stop with retrofilling existing transformers. Waukesha moved into installing Envirotemp FR3 fluid in new transformers in 2005. Earlier this year, Waukesha installed a new plumbing system for handling natural ester fluids in the south main assembly aisle. Special thanks goes out to John Heisenfeldt for engineering and managing the installation of this system that makes use of modern process automation technology to minimize manual labor to accomplish the fluid handling procedures. The new FR3 fluid handling system is currently installed only at

FR3 provides a!ractive alternative to mineral oilPopularity increases in the transformer industry

Article continued on page 8

Letter written by David Neff, Senior

Engineer at PPL Electric Utilities after a recent trip to

the Waukesha Goldsboro facility.

Letter written by Prateek Sharma, Junior

Sales Engineer at electrocomposites after Hydro

Québec’s training class early in June.

The Waukesha ExperienceIn Action

The Waukesha Experience is catching on, and employees are consciously making it a part of their everyday interactions with Waukesha affiliates. While many of

these interactions are appreciated, gratitude is not always expressed. When it is, however, it is important for employees to be given the opportunity to see their hard

work noted. Below are two letters that were received by Waukesha employees expressing gratitude for a memorable Waukesha Experience:

Hi Greg (and the rest of the Waukesha Team)-

I believe you covered all the items we talked about in our meeting(s). Thanks for documenting them.

I enjoyed the times we spent at the factory and also socializing in the evening. Before coming down, I had

asked for an extended visit in the winding room while doing the factory tour. Rudy did an outstanding

job of meeting my request. Bob and Pat got all they could possibly absorb. Charlie and I enjoyed it also.

I learn a bit more every time that I'm at a factory.

Thanks to all of you who sacrificed time with family and loved ones while entertaining us in the evening. I know I speak for all four of us when I say that we really appreciate what you did and gave up to be with

us.

We, as utility folks, are no different than others in that everyone has more work

than they can possibly do. Visiting factories takes from that time, but - the

value gained is significant; and as equipment specialists I believe it is a very important part of our jobs.

Thanks Again,

Dave

Hello everybody,

I would like to like thank the HVS team for the professionalism they showed during Hydro Québec's

training class last week.

Marc and his team mentioned several times how they were overwhelmed by the expertise that HVS

posseses and that they are looking forward to doing business with HVS on a regular basis.

I would like to thank Liz and Fernando for their warm hospitality and for presenting the transformer

health products and the ''before and after capabilities'' of HVS. I would

also like to thank Mike, John and Geoff for answering a lot of the technical

questions that arose during the training class.

Thanks Again!

Prateek Sharma

Enhanced Product Development Program Launched:Program seeks employee input Waukesha Electric Systems has recently enhanced its New Product Development Program that places an improved structure around new product development, research & development and other strategic efforts. It encompasses everything from idea generation to project selection, development and full commercialization. “We have some great projects being worked on right now, but did not have the quantity of resources in place to direct the execution of getting these projects directly to the customer. This enhanced program assists in addressing those issues, which I believe is more complex than what most people may realize. In addition to long and short-term company strategy combined with

research & development, detailed planning and consideration is required within manufacturing, sales/marketing, sourcing, finance, service, engineering, legal, and systems,” states Eric Scamfer, Director of Product Development. Additionally, “Pulling all of this together and gaining cooperation from all functional areas is critical for successful product launches that assist in shaping Waukesha’s future.” In addition to the current process and projects that are being worked on “we will be looking for input on new product / project ideas later in the year as we are currently busy working on and implementing current projects,” cites Scamfer. “Look for additional communications regarding

company-wide input in the fall time frame.” Finally, another aspect of the process is selecting project managers. Once an idea has been approved, a project manager is needed to facilitate the commercialization of the project. “We are in need of project managers to ensure the full commercialization process is adhered to. This will give employees a valuable opportunity to work in many facets of the business, gain executive exposure and further develop project management skills,” says Scamfer. If this development opportunity is of interest to you, please contact Eric via email, x1563 or in person for further information and consideration.

Phase Definition

Generation of ideas and initial screening of projects

Idea Generation

Concept Development

ScreeningCommittee

FeasibilityAnalysis

Steering Committee

Development Commercial-ization

Key Actions-Bring ideas to the group from your organization-Provide advocacy for the R&D process-Select projects for further develop-ment

Key Actions-Determine strate-gic fit, profitability, reasonableness and if customer’s needs are being met-Develop detailed report including commentary on each point within commercialization

Key Actions-Review develop-ment documents and update as needed-Create project score-Review and affirm discarded projectsAssist with feasibil-ity studies upon request

Key Actions-Develop standard-ized finance and E201 reports-Work with sales & marketing to finalize appropriate targets-Commercialization risks to be assessed-Provide company strategy commen-tary

Key Actions-Review feasibility studies and Screen-ing Committee scoring-Review status of ongoing projects-Review and afford discarded projects-Assign project man-agers on approved projects

Key Actions-Drawing design with tolerances-Material specifications-Supplier options-Material ordering and receiving-Physical prototype development-Assembly docu-ments-Initial testing

Key Actions-Multifunctional change meeting-Intellectual property & Ts&Cs review-Production planning-Quality program development-Sourcing contracts-Marketing strategy-Product education-Collateral Dev.-Service Planning-Post launch metrics

Phase Definition

Initial Develop-ment of ideas on a high level using estimates

Phase Definition

Determination if a feasibility study should be completed

Phase Definition

Detailed analy-sis from finance, sales/mktg. and engineering

Phase Definition

Executive over-sight to approv-ing and review of projects

Phase Definition

Physical development of product to include testing

Phase Definition

Internal project management to launch the product

NO-GO NO-GO NO-GO NO-GO NO-GO NO-GO TABLE TABLE TABLE TABLE TABLE TABLE

Market Served

IdeaGen.

ConceptDev.

Screen-ing

Screen-ing

Steering Steering

4 5

Total Assembled Weight: • 1,058,000 lbsWaukesha supplied 47,350 gallons • of oil10 Truckloads of detail parts were • deliveredThere were over 1,300 assembled • piecesThe average daily high •

temperature during installation: 22xF (Wind chill of 10xF)

Installation Site - Anaconda, MT•

Project Snapshot

Waukesha Service Installs Phase Shifter

Great service builds relationship with BTW

Waukesha Service team moving a BTG exciter transformer

into position to connect to series transformer.

Completed phase shifting transformer ready for

energization. Installation performed by Waukesha

Electric Systems Service.

The graph above gives a good visual on just how much the value of scrap metal

has increased in the past year.

Bins similar to the one above are located through-

out the plant for employees to recycle excess

pieces of metal. The bin above is for insulated wire,

while there are separate bins for bare wire.

You may have noticed the collection boxes, barrels, and bins for scrap metal located near stacking tables and machines in the factory. You may have also wondered why you have been asked to focus your attention on recycling scrap metals into these containers properly. Well, your efforts to do so are appreciated because scrap metal is more valuable then you may have realized! The industry has seen a significant rise in metal prices in the past year resulting in an enormous increase in the value of scrap metal. This gives Waukesha an opportunity to maximize the value of scrap metals including, but not limited to, copper, carbon plate steel, electrical steel, and stainless steel. Ideally, Waukesha prefers to optimize the use of its raw materials as much as possible. A developing “Nesting” program will hopefully aid this process by analyzing and configuring innovative ways to make the best use of every piece of metal used during the production of transformers.

Since the creation of some scrap is unavoidable, it is important to follow a few simple guidelines when disposing of valued scrap metal:

Please place each individual • type of scrap metal in the appropriate designated scrap bin.Please try to keep scrap as • clean as possible.For sheets of electrical steel, • please avoid as many bends and folds as possible.Please avoid throwing trash in • scrap bins as this decreases the value of the metals.

Waukesha wants to recycle scrap metal productively so that the scrap processor and end user can reuse it in the fullest way possible, increasing the value of the materials. For example, electrical steel was previously sold solely as scrap that was melted and processed to make new steel. Waukesha received a

mere 18 cents per pound. Now, electrical steel scrap is being sold overseas to companies who will use it as their raw material to manufacture smaller electrical products. They use the steel as is and pay up to one dollar per pound! The amount received per pound is dependent on the size and condition of the scrap steel, which reiterates the importance of keeping the metal clean with as few bends as possible. Copper is another example of a valued scrap metal. As employees may know, there are various types of copper wire used in the factory, including bare and insulated magnet wire, lead cable and control wire. Bare magnet wire is worth about 10% more than paper insulated magnet wire and 40% more than paper insulated lead cable. The decrease in value of insulated copper is due to the weight of the paper and additional processing to make the copper usable. When various types of copper wire are mixed in one scrap barrel they are measured based on the price of the insulted wire

Waukesha maximizes on the increasing value of scrap metal

Article continued on page 6

On April 13, the Waukesha Service organization finished the installation of a Phase Shifting transformer delivered to Northwestern Energy. The unit was built by BTW, a Chinese transformer manufacturer. “Although this unit exceeds our size capability to manufacture, we were able to generate revenue from the project by participating in the installation and testing phase of the process,” said Troy Kabrich, General Manger, Service. A Waukesha Service crew including Spencer Setty, Jim Harris, Paul Kent, Tom

Kozisek, Adam Johnston and Tony Dorsett installed the transformer. It took 20 days to assemble, oil fill and test

the phase shifting transformer. Waukesha also handled the delivery of the transformer from rail siding to customer foundation. It is not unusual for the Waukesha service organization to install transformers manufactured by competitors. Many transformer producers lack the sophisticated capability to install and test units in the field. In 2003, Waukesha Electric Systems installed two similar units in support of BTW for another US customer and BTW has already

requested support for another installation planned for 4th quarter 2008. Partnerships developed

by the service organization are an excellent way for Waukesha to grow top line revenue and stay connected to the large power marketplace. Kabrich and his team work to meet the needs of customers across a broad spectrum. Both BTW and Northwestern Energy were extremely pleased with installations performed by the service group and BTW is considering a formal service relationship for other deliveries planned for US

customers. In a follow-up letter written by Maggie F. Xia, the International Marketing Representative for BTW, she states, “You and your team did an exceptional job to make sure that the customer was totally satisfied with this unit.”

Benefits Highlights

6

News Worth Noting...

Waukesha employees in front of the Habitat HomeStore

after a hard day’s work. From left to right, Kelly Smith,

Ben Clark. Rebecca York, Mike Kennedy, Dan Johnson,

Jim Phillips, Melissa Rath, Chris Stachnik, Rick Kender,

and Chris Matthews. Not pictured, Eric Conrath.

7

On May 17, employees from the Waukesha, WI facility gathered at the Milwaukee County Zoo in support of Trent Spear’s son, Elliot, who is living with Duchenne Muscular Dystrophy. “Team Elliot” consisted of Waukesha employees, friends, family and members of Elliot’s

church and school. The Walk with the Animals was a successful event. In total, nearly $55,000 was raised to benefit more than 500 families in southeastern Wisconsin affected with muscular dystrophy. Thanks to everybody who participated!

Tip #1: Appliances like phone chargers, toasters and microwaves still use energy whenever they are plugged in to an outlet even if they’re turned off! A study done at Berkeley University in California showed that, “Eliminating this standby or "leaking" electricity could save households between 6 and 26 percent on their average monthly electricity bill.” Who would have imagined that you could save money while conserving energy!?

Tip #2: According to iVillage.com, adding a couple dry, clean towels to your dryer helps pull the moisture out of the other wet clothing items, which reduces the number of minutes you’ll need to keep the dryer running. LESS TIME = LESS ENERGY = SAVE MONEY! Tip #3: Do you find yourself gazing into the refrigerator contemplating what snack you should choose? We all do it, but those minutes spent pondering over

Waukesha Going Green!Tips on how you can “GO GREEN” and SAVE MONEY!

Waukesha employees join together in the fight against Muscular Dystrophy

On Friday, May 9, eleven Waukesha Electric Systems employees volunteered at the Habitat for Humanity HomeStore. The Habitat HomeStore is a home improvement store that sells donated merchandise at huge discounts to the general public. The store is also a major source of funding for Habitat for Humanity of Waukesha County. The group was kept busy the whole day, applying cement texture to bathroom walls, breaking apart concrete and pulling nails from baseboards. The bulk of the work, however, involved moving items to

The Waukesha Experience in the Communityhelp the store get organized and ready for business. The team moved over one hundred doors that were scattered throughout the building into one area. They also moved wood up to the second floor, creating room so all appliances could be placed in one section. The team had a great time helping out and encourages everyone to try it for themselves! The next event will be held on August 22. You may contact Jackie

or lead cable, reducing the overall value. Purchasing and the Continuous Improvement Team are working with the plant to identify areas of improvement to maximize the value Waukesha receives for its scrap materials. One area they are focusing on

is the proper segregation of scrap - and employees may soon see further instructions to help maximize scrap value. Receiving an optimal price for scrap metal is not the only reason Waukesha asks that recycling be done correctly. It is environmentally friendly to make

Waukesha maximizes on the increasing value of scrap metalsure that excess metals are used to their fullest potential instead of being wasted. As resources become more scarce, continuing to reuse raw materials remains important. With all this being said, please take care of your scrap metals, because they are becoming of significant value to the company!

Continued from page 3

food choices is costing you money! According to MSNBC.com, “the refrigerator is the single biggest energy-consuming kitchen appliance, and opening the refrigerator door accounts for between $30 and $60 of a typical family’s electricity bill each year.” Not only are you wasting money but you’re wasting an enormous amount of energy! According to the web site, the saved energy from using your refrigerator resourcefully for a year “could be enough to light every house in the United States for more than four and a half months straight!” Next time Think about what you want before opening the refrigerator, because it’s costing you!

Receiving monthly prescription drugs can be made easier through Medco’s mail order online program. This service makes ordering prescription drugs more convenient - and the program is easy to use! If these reasons aren’t enough to encourage you to register for the online service, then here are 10 more: 10. Alternative, LESS EXPENSIVE, medicines for your prescribed medications will be recommended to you through the program. 9. Reminders to re-order your medication will be sent to you by e-mail. 8. Order confirmation will be sent to you by e-mail. 7. Tracking the status of your

prescription with an estimated delivery date is possible through the program. 6. A history of all orders placed through the program can be viewed online either individually or collectively. 5. A letter will be sent to you and your doctors if at any time a potential problem arises with the mixing of certain medications - very important! 4. When your prescription has expired with no more refills, your doctor will be contacted automatically to have your prescription renewed. You will also be updated through e-mail! 3. At the end of each year, you have the ability to total prescription costs based on what SPX and you

spent on medications. This will make income taxes much easier! 2. Non-prescription drugs are available online through Medco and can be purchased in bulk and are sometimes cheaper. 1. SAVES YOU MONEY AND TIME! (In more ways than one) See for yourself how easy it is to register for all of these great online services through Medco. Go to www.medcohealth.com and click on register now. To get started, you will just need to provide some personal information and member ID from your insurance card. The web site is very helpful and easy to use, so don’t wait any longer to make ordering prescription drugs easier for you and your family!

Mail Order Online Program simplifies prescription drug purchases

Aetna Health Connections is SPX’s health improvement program. It offers employees easy access to resources that can help take life in a healthy direction. Health Connections provides educational information by mail, online and by telephone consultations with a registered nurse and helps in managing chronic illnesses and health assessments. Participation is voluntary and free and your personal health information is confidential

within the Health Connections program, and identifying information is not shared with SPX. Have a health-related question or concern? Not sure whether you should go to the emergency room or wait to see your doctor? Want to learn more about a certain condition or illness? Not sure what questions to ask a specialist? Talk to a registered nurse who can provide information on more than 5,000 health and

wellness topics. Call the Health Connections Informed Health Line at 1-800-556-1555 or access the Healthwise Knowledgebase, one of the most advanced online health databases available today. Get there quickly and easily using your secure Aetna member web site, available through www.aetna.com. Aetna Health Connections is available to participants enrolled in SPX Medical Plans A and B, an HMO or have elected No Coverage.

Using Aetna Health Connections

Tate, x1239, at any time if you are interested in joining.

Welcome New Hires!May 16, 2008 - June 15, 2008

The Transformer Informer is published expressly for the employees of Wauke-sha Electric Systems and its subsidiaries. Any unauthorized reproduction or distribution of this publication beyond company personnel is strictly prohibited. Suggestions for future content should be directed to Lauren Kerrick, Editor, The Transformer Informer, Human Resources Department, 400 S. Prairie Ave. Waukesha, WI 53186.

© Waukesha Electric Systems, Inc. 2008

Jerry Benston, WTManufacturing Supervisor

Joshua Brown, GTManufacturing Engineer

Paul Dadian, WTCutter/Stacker

Jason Passehl, WTDispatcher

FR3 Oil: Popularity increases in the transformer industryContinued from cover

Waukesha’s Wisconsin Transformer manufacturing location. According to Moore, “As demand grows we will evaluate adding the capability to fill new transformers with FR3 at Goldsboro as well.” Waukesha has already built 29 new transformers with FR3 fluid, even though this time and money saving system has been in service for just a few months. Filling transformers with natural ester fluid instead of the more traditional mineral oil comes at a price though. Utilities pay between $50,000-$200,000 more per transformer to have them filled with FR3 fluid. With a price tag like that, some may be wondering how utilities will benefit from this revolutionary green oil—tinted emerald to reflect its favorable environmental profile. More and more customers are switching to FR3 fluid because of its enhanced fire safety, ability to slow the aging rate of cellulose insulation, reduced

carbon footprint and superior environmental profile. Insurance carriers like FR3 because it has a much higher resistance to ignition than mineral oil. FR3 fluid has a fire point of 360°C versus mineral oil’s fire point of 154°C. Factory Mutual Global, a well known transformer insurer, allows closer spacing between FR3 filled transformers and buildings, thus saving our customers money. Additionally, more costly and purely reactive fire protection schemes such as fire walls and deluge systems are typically not required. Envirotemp FR3 fluid also significantly slows the aging rate of the cellulose insulation, thus lowering life cycle costs. Environmentally, FR3 fluid is non-toxic and because it is soy-based rather than petroleum-based, it typically biodegrades quickly in the rare event of leaks

or spills. Additionally, Moore is beginning to educate customers on FR3’s newest benefit—a reduced carbon footprint—or the measure of the net amount of carbon dioxide released into the environment in the production of the product. It is no wonder that more and more utilities have discovered the benefits of FR3 fluid and are using this soy-based oil as a safe, ecological alternative to mineral oil. FR3 fluid’s cost-saving and environmental qualities help Waukesha employees live out the Waukesha Experience through commitment to their customers and the community at large. With FR3 fluid, Waukesha offers its customers products with the highest standard of quality, leads the industry in a new direction and distinguishes itself as environmentally responsible.