I. Energy / Utilities

A. Electricity

1. Consumption per gross pound melted = .6990 kwh / gross lbs melted

2. Cost per KWH = .08968$/kwh

3. Adjusted for Yield.

4. Electricity costs per ton and pound

a. 2010 = (2000 lbs x .6990 kwh/gr lb melted) x .08968$/kwh = $120.54/ Gr ton melted

b. Adjusted for yield to get to $/net pound – 0.1159 – 0.0488= .0671$/net pound

c. If a customer’s yield is higher or lower, it will have a significant impact and will be adjusted for accordingly.

B. Natural Gas

1. Dollar consumption per gross pound melted = .0054$ / gross lbs.

a. Adjusted for yield – 0.0104 – 0.0081 = 0.0023$/net pound

b. If a customer’s yield is higher or lower, it will have a significant impact and will be adjusted for accordingly.

C. Coke – Cupola Shop = $506 / nt purchased

a. Adjusted for yield

b. If a customer’s yield is higher or lower, it will have a significant impact and will be adjusted for accordingly.

c. Coke is the primary energy source in a cupola melt operation, independent of the electricity required for the holding furnace. Increased cost is reflected in a “charge” cost calculation. (See charge cost June 7, 2010 below).

D. Water / Sewer = .0062$ / gal

a. Adjusted for yield – 0.0119 – 0.0081 = 0.0038$/net pound

b. If a customer’s yield is higher or lower, it will have a significant impact and will be adjusted for accordingly.

E. Energy total

          a. Electricity – 0.0671$/net pound variance to base

                 b. Natural Gas – 0.0023$/net pound variance to base

                 c. Charge Coke – 0.125$/net pound variance to base

                 d. Water / Sewer – 0.0038$/net pound variance to base

e. If a customer’s yield is higher or lower, it will have a significant impact and will be adjusted for accordingly.

II. Disposal Costs – Consumption per gross lb melted = .0113$/gross lb

a. Adjusted for yield – 0.0113 – 0.0065 = 0.0048$/net pound variance to base

b. If a customer’s yield is higher or lower, it will have a significant impact and will be adjusted for accordingly.

III. Pre-charge cost calculation / Disposal and Energy

       a. Energy total – 0.0732$/net pound variance to base

                              b. Disposal total – 0.0048$/net pound variance to base

c. If a customer’s yield is higher or lower, it will have a significant impact and will be adjusted for accordingly.

IV. Charge calculations – Base Year January 4, 2010 (See Link)

V. Total surcharge adjustment since base Year 2010.

a. Charge cost increase. - 0.1764$/net pound variance to base

b. Environmentals & Disposal Increase – 0.0048$/net pound variance to base

c. Energy Cost Increase – 0.0732$/net pound variance to base

Subtotal – 0.2544$/net pound variance to base

d. If a customer’s yield is higher or lower, it will have a significant impact and will be adjusted for accordingly.

VI. It should be noted by all, that under the Obama Administration, all of the above costs will only increase dramatically for many years to come.

As noted from the above calculation our current surcharge should be 0.2544$/net pound, however , we have, at this time chosen to maintain our zero surcharge policy

Daniel Schultz

President & CEO

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SURCHARGE CALCULATION

June 7, 2010

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