North Coast Electric Company

To all North Coast Electric Customers:

Many of you may have heard about the emerging crisis regarding “Rare Earth” elements coming from China and the dramatic impact on the price and availability of T8, T5 and Compact Fluorescent Lamps (CFLS).

China has significantly reduced exports of Rare Earth elements while drastically raising prices to manufacturers on certain elements that are almost exclusively sourced from China.

What does all this mean to us?

Pricing:

• T8, T5 and CFL pricing which has traditionally been quite stable is now rising rapidly
• Our fluorescent lamp prices have already increased an average of 4-5% as of July 1, 2011
• We will have another increase of approximately 25%-30% on August 1, 2011
• Subsequent to that we anticipate “price in effect” pricing from all manufacturers
• We have no choice but to adjust our prices in response to this situation

Availability:

• The crisis has created a buying frenzy that will impact supply
• We are beginning to see the first allocations from manufacturers

Projects:

• Specified lamps may not be available requiring alternatives be considered
• Project costs will be impacted by the price increases
• Fixtures ordered pre-lamped may need to be sent without lamps and lamped in the field

You have our commitment that we will do everything we can to secure the best pricing and insure product availability as we work closely with our manufacturing partners to manage this crisis.

It is our intent to keep our associates and customers informed every step of the way as we work through this situation together.

For the latest updates contact your local Service Center or visit our website Blog under Announcements at: http://www.northcoastelectric.com/blog/nces-big-blue-blog/announcements-1/

Sincerely,
Cory McCulloch
VP Sales
206-442-9887