FINAL MEMORANDUM Membranes Atth.pdfGE/ZENON REPLACEMENT OPTIONS GE/Zenon currently manufactures...

CITY OF ASHLAND OREGON

Wastewater Treatment Plant Membrane Replacement Options

FINAL MEMORANDUM

September 13, 2010

210055-000

210055/2/10-406 1

131 SW 5th Ave. Meridian, ID 83642 208-288-1992

FINAL MEMORANDUM

Date: SEPTEMBER 13, 2010 To: SCOTT FLEURY AND MIKE FAUGHT, CITY OF ASHLAND From: LARRY RUPP Subject: CITY OF ASHLAND WWTP MEMBRANE REPLACEMENT OPTIONS This memorandum summarizes the review of the membrane replacement options for the Ashland Wastewater Treatment Plant (WWTP). The need for this review is due to the concern with the condition of the existing membranes and the need for additional capacity. Below is a summary of items reviewed in providing our recommendation to the City of Ashland.

1. Review the existing membrane system. 2. Review the membrane inspection spreadsheet provided by Ashland staff. 3. Perform a hydraulic analysis to determine other components that may need to be

replaced if a higher capacity membrane is installed. 4. Review membrane replacement options from other potential suppliers to

determine if a feasible option exists that will fit within the existing system. 5. Review membrane replacement options from Zenon. 6. Provide a recommendation for membrane replacement.

In addition to the steps listed above, an attempt was made to review the historical operational data (cleaning intervals, permeability, and turbidity) that are available on ZenoTrac. To date, the ZenoTrac data has not been reviewed. The review is pending based on feedback from Zenon. Depending on the data available, it could be used to recommend a higher or lower flux rate and to better determine if the existing membranes are approaching their existing useful life. EXISTING MEMBRANE SYSTEM The existing membranes have been in operation since May of 2002. Since the original commissioning, an additional 10 % capacity was added in January 2008 by installing membranes similar to the original membranes in the remaining basin area. Current flows indicate the need for additional capacity is approaching. Another concern is the life of the existing membranes. Additionally, the City has a price guarantee for membrane replacement that is due to expire April 4, 2011. Plant staff conducted an inspection of the membranes (See summary of results in Table 1). The inspection revealed that a number of fibers are separating from the urethane potting. This is likely due to over exposure of chlorine. Approximately 25% of the membrane cassettes have more than half of the fibers loose.

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Table 1 – Condition of Existing Membrane Cassettes

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Another consideration is the life expectancy of the membrane fibers. With Ashland being one of the first tertiary membrane installations, data to determine the life expectancy is not available. Membrane life can vary widely depending on the operating conditions, chemical exposure, membrane materials, and other factors. Loss of permeability even after cleanings is typically an indication of the need to replace membranes. A life expectancy of 10 years is not uncommon for wastewater. For the Ashland WWTP, an even longer life expectancy could be realized as the membranes are only operated 7 months a year. HYDRAULIC ANALYSIS The membrane system was modeled hydraulically using spreadsheet calculations. Initially the limiting factor hydraulically is the permeate pumps which have a capacity of 1.13 mgd for a total capacity of 4.5 mgd. The permeate piping is also designed to handle approximately 4.5 mgd. Any membrane capacity expansion beyond 4.5 mgd should include a replacement of both permeate pumps and piping. POTENTIAL MEMBRANE SUPPLIERS In addition to the original membrane supplier (GE/Zenon), Koch Membrane Systems (Puron) also provides cassettes/modules that are made to replace GE/Zenon membranes. A proposal from Koch for membrane replacement at the Ashland WWTP is included in Appendix A. The cost for Koch membranes is approximately $6.00 to $6.50 per ft.2. This is slightly less when compared to GE/Zenon replacement cost shown in Table 2. If this option is pursued, it is recommended that further detailed design level evaluation be completed in order to verify compatibility and identify any required modifications to the existing system. GE/ZENON REPLACEMENT OPTIONS GE/Zenon currently manufactures three feasible options for replacing the membranes at the Ashland WWTP. In order of the least to most capacity the options are ZW500C-250, ZW500D-340, and ZW500D-440 with the last three numbers corresponding to the amount of membrane surface area per module. Appendix B contains a copy of GE/Zenon’s proposed scope of replacement and budgetary pricing. Table 2 summarizes the GE/Zenon’s options. Options 4 and 5 are not recommended at this time as they require a major upgrade of the membrane system. Using the ZW500D-340 would add very little capacity because the current configuration will only fit 20 modules per cassette versus the existing 26 modules per cassette. Similarly the ZW500D-440 option would only be necessary if peak flows require membrane treatment.

210055/2/10-406 4


Figure 1 shows a recommended replacement schedule. This schedule is based on the maximum month flow and population projections to date (@ 1.66% growth rate) and may require revision as these projections are finalized with the master plan. The details of the membrane replacement are shown in Tables 3-5. For example Table 3 shows a recommendation for replacing modules and moving other existing modules. The result shown in Table 3 are obtained by replacing the damaged cassettes in trains 1, 2, and 3 with new cassettes and moving the good cassettes from train 1 and train 2 to train 3. The result is membranes in the worst condition are replaced and there are two trains of new membranes.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026

MG

D

MMF

Treatment Capacity

Figure 1 - Projected Membrane Replacement Schedule

2011 Replacement

2015 Replacement

2022 Replacement

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Table 3 – Phase 1 Replacement

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The future recommendations account for future flows and should be re-evaluated before proceeding with membrane replacement. The membrane replacement recommendations are based on both meeting capacity objective and on an expected membrane life of 10 to 15 years. Another approach that could be employed would be to replace based on capacity and continue to use the membranes until a drop in performance is noticed. This approach would result in pushing the membranes to the edge of their useful life versus replacing membranes based on expected useful life. Table 6 shows the membrane replacement for phase I if this philosophy is employed. It should be noted that the recommendations are based on being able to treat maximum month flows. Peak hour flows would bypass the tertiary membrane system. For the purposes of meeting the effluent phosphorus limit treating maximum month flows appears adequate for the near future. Due to the phosphorus limit being load based, the amount of flow that can be bypassed while still meeting the limit will decrease as overall flows increase. As the flow increase requires lower and lower effluent phosphorus concentrations, other options should be explored for meeting the phosphorus limit. If the City desires to treat all flows including peaks, additional membrane capacity will be required. This should be considered as temperature options which may require membrane treated effluent are explored and finalized. MEMBRANE REPLACEMENT RECOMMENDATION SUMMARY It is understood that the chosen membrane replacement option which meets the City’s budget is as shown in Table 6. This is a less-conservative approach than replacing membranes in both train 1 and train 2. However, with the outstanding temperature issue, which could affect the membrane design and use, this approach is more fiscally conservative. Once a direction is known on the temperature issue, it is recommended to revisit replacing train 2 within the next year or two, as shown in Table 3. Based on the review conducted, it is recommended to provide 9 new ZW500C- 250 cassettes to train (as shown in Table 6). The estimated replacement cost based on information provided by GE/Zenon is $400,000. This will allow the City to accomplish the following:

Replace damaged cassettes Take advantage of the replacement price guarantee for one-quarter the

membranes Upgrade the capacity Decision on majority of membrane replacement can be made after knowing the

affect of the meeting the future temperature limit on tertiary treatment In addition, the good cassettes should be moved to train 3, as shown in Table 6, to replace those that have fibers separated from the potting.

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Table 6 – Phase 1b Replacement Option

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Reasons for proceeding with the option shown in Table 3 in the next two years include:

Some damaged cassettes are not replaced The option shown in Table 3 better fits a long-term replacement schedule when

considering expected membrane life It is recommended that this evaluation be performed again prior to future membrane replacement (targeted for 2015) to determine if the replacement shown in table 4 is still the best option. If peak capacity is to be met or once the max month capacity exceeds 4.0 mgd, new piping, pumps, and blower modifications will be required. At that time, converting to a higher capacity membrane would also be necessary.

Appendix A

Koch Membrane Systems Proposal

We are happy to be able to offer our PURON PSH – 500 at a price to you of $ 70.00 / Sq Meter or $35,000.00 per module for the first 10 modules and $65.00 / Sq. Meter or $ 32,500.00 per module for the second block of 10 modules if they are ordered at the same time. This is a not to exceed price for the membrane only and is good for orders placed prior to 12/1/2010.

Interestingly we have just gotten data back on our Santa Paula Project ( 3.2 MGD ) located just 10 miles from the Fillmore ( 1.8 MGD ) GE Zenon project. These 2 projects were built at exactly the same time and treat standard domestic waste with a very small industrial component. The energy used with the PURON project is 40% LESS than the Zenon project on a gallon for gallon basis.

As we have discussed, if this is a sufficiently attractive price point, we will need to conduct a site visit to determine the granular details that will be involved in the project. Please let me know your thoughts. Thank you - g Grant Newhouse Western Regional Manager Koch Membrane Systems 2109 Mangrove Ct Antioch, CA 94509 925-706-9398 O 925-234-3171 C 925-753-5671 F

© 2006, Koch Membrane Systems, Inc. All rights reserved.© 2006, Koch Membrane Systems, Inc. All rights reserved.

Submerged Membranes for MBRSubmerged Membranes for MBR

PURONPURON


PURON MBR MarketsPURON MBR Markets

PURONApplication

MuniWW

Textile

Pharma

Laundries

Petro ChemFruit &

Vegetable

MeatProcessing

Dairy

Beverage

PaperMaking


Mechanical StrengthMechanical Strength

10 liter bucket filled with waterno fiber breakage during operation

long membrane lifetime


Membrane Braid Penetration

braidbraid

membrane polymer


braid

filter surface

2.6 mm

braid inside of membrane

PURON® Hollow Fiber MembranePURON® Hollow Fiber Membrane

bacteria

viruses

filtrate

10 µm

2 µm 2 µm 2 µm 2 µm 2 µm

outer cross section of membrane

enlargement: 10.000 x


Modular DesignModular Design

air supply Module row

permeate removalfiber support

basicelement

Adjustable free spacebetween individual

rows


Header ElementHeader Element


PURON Membrane ModulePURON Membrane ModuleAir supply

Module rows

Air distribution

Fibresupport

Permeateremoval in each row

permeate

Permeate collector

Open end fibresindividually

sealed

Mountingdevice

ModuleFrame


PURON membrane modules

same footprint as ZenonZenon: 440 m² (500C) PURON: 500 m²

individualadaptation of module size to special customer preferences

Standard sizes: 30 m2, 235 m²500 m², 1500 m²


5,400 ft2 (500 m2) module

500 m2 Module Specification500 m2 Module SpecificationMembrane Module Specification

Length 6.6 ft

Width 3.3 ft

Bundles per row 9

Effective fiber length 5.9 ft

Membrane area 5,400 ft²

Height w/out frame 8.2 ft

Permeate Connection

Air Connection 2 in

3 in


PURON Production Facility PURON Production Facility


Removal of particulatessandhair, fibrous materialsother solid matter

Biodegradation of dissolved components

Solid-liquid separation

WWTPEffluent

Surplus sludge (biomass)

WasteWater

phosphorus biomass

carbonnitrogensulphur

CO2 + biomassN2 + biomassbiomass

disinfectionbiomass rejection

standard sedimentation: 10,000 CFU/ml

Function of WWTPFunction of WWTP


membrane bioreactor

Advantages of MBR over Conventional WWTP Advantages of MBR over Conventional WWTP

conventional plants

primary treatment

biological step clarifier

Lower cost than conventional + tertiary UF for reuse

Improved effluent water quality

Ability of water reuse

Reduced footprint (approx. 50 %)

Avoids the problems associated with bulking and floating sludge

Advantages:


Requirements for Module Design Requirements for Module Design

good sludge managementbackwashing abilityhigh mechanical stabilityeffective air injection

design requirements

equal hydraulic load – low pressure losses

high packing densitycost effective module designlong lifetimelow cost material – simple construction

economic requirements


Membranes in Sludge

solids management

Design Goals

robust module design to minimize problem components (hairs, fibers,...)safe flushing of the solid matter out of the module

membrane filtrationlocal dewatering of the sludge

concentration of solids in the module

may lead to a blocking of the module


Membrane ConfigurationsMembrane Configurations

• Submerged– Hollow Fiber– Flat Sheet

• External Cross Flow– Tubular

SubmergedModules

Cross Flow Modules


Clogging

Clogging by hairsand fibrous materialat the upper end

Double Header DesignDouble Header Design

Sedimentation of sludgein poorly aerated

potting area

Sludging

filtrate

Result: reduced filtration rate & membrane stress


Flat Sheet DesignFlat Sheet DesignEdge clogging

low flow rate on the edges leads

to clogging

Gap clogging

are susceptibleplate gaps

to clogging

uneven

resulting in: high aeration rates


PURON Submerged Membrane PURON Submerged Membrane

filtrate

individually sealed hollow

fibers

• Single pot design

• Central aeration• Fiber bundle

reduced clogging and sludging

reduced energy consumption for aeration

main advantages


Central air injection

Sealed endDesign concept:

Design advantages:

Reduced clogging and sludgingReduced pretreatmentReduced energy consumption (aeration)

Filtrate

PURON™ MBR TechnologyPURON™ MBR Technology

Filters submerged in feed water

Permeate drawn out of membrane tubes via lower foot elementSingle header principle ensures hairs, fibrous substances and sludge are removed safely out of the system


Membrane Tank Hydraulic - Clearances

Water level above membranes:If too small, higher horizontal velocity at top end of Membrane fibers (~ 12”)

Distance to tank wallsIf too small, danger of downwards velocity in membrane module (~ 8“)

Distance to bottom of tankInfluences sludge turbulence and sludge distribution (~20”)


PURON Fibers Installed


Pretreatment RequirementsPretreatment Requirementsgap meshed perforated

horizontalvertical

1 mm 2 mm 3 mm


PrescreeningPrescreening

Simmerath is operated with 3 mm gap-screen

components found in the biology


extra cellular polymer substances (EPS)

bacterium

EPS

polysaccharide

humic acid

lipids

proteins

membrane

pore plugging

filtrateactivated sludge

poreblocking

Membrane FoulingMembrane Fouling


Sludge-side air scouring, continuous or intermittent

To maintain the required system flow rate, three cleaning methods are currently used:

Permeate backflush or relaxation

Chemical cleaning, in intervals or operational related

Cleaning MethodsCleaning Methods


Intermittent aeration

Filtration interval

Operation with constant flow rate

Flushing time

Module flushing

time

Pres

sure

Operational ModesOperational Modes


RejectedBiomass Membrane

Permeate backflushing Air flushing

DetachedBiomass

AirFlushing

Membrane

timeenergyfiltrate

Module flushing needs

Effective Module FlushingEffective Module Flushing


timeconcentration

temperature

cleaning efficiency

cleaning chemicals

Chemical CleaningChemical Cleaning


• MBR provides– High quality effluent– Reduced footprint

• PURON MBR Technology– Minimizes clogging and sludging– Less pretreatment– Less energy consumption

• Over four years operational experience – Municipal and industrial applications

SummarySummary


PURON PURON


References - PuronReferences - Puron


Municipal Plants SoldMunicipal Plants Sold


Industrial Plants In OperationIndustrial Plants In Operation


US Mega Magnum PlantsUS Mega Magnum Plants


Global Mega Magnum PlantsGlobal Mega Magnum Plants

Appendix B

GE/Zenon Membrane Systems Proposal

City of Ashland – Membrane Replacement 42377063 ©GE August 16, 2010 Page 1 of 9

GE Water & Process Technologies Canada

o/a ZENON Environmental Corporation

3239 Dundas Street West,

Oakville, Ontario, Canada L6M 4B2

Membrane Replacement & Installation Proposal

Tel: 905 465 3030 Fax: 905 465 3050

To: City of Ashland Date: August 17, 2010

Attention: Mr. David Gies Email: [email protected]

Telephone No.: 541 552 2335

Fax No.: 541 552 2364 Address:

City of Ashland

20 East Main Street

Ashland, OR 97540 No. of Pages: 9 including cover

Email: Laura. [email protected]

Telephone No.: 905 465 3030 x3715

Cell 905 464 3038 From:

Laura Black

Regional Lifecycle Manager,

Western USA Fax No.: 905 465 3050

Cc: Scott Hortop, Jim Imrie, Julie Hatch, Ed Coulter, Seth Ginter, Dennis Favret

Proposal No.: 42377063 Subject: Membrane Replacement

Project No.: 500127

Plant: Ashland Secondary Effluent Treatment Plant, 1259 Oak Street, Ashland, ADF 2.78 MGD, ZeeWeed® 500c, 4 Trains, 10 Cassettes/Train, 26 Modules/Cassette, 1040 Total Modules. Substantial Completion Date – Oct 17, 2002


1 Introduction This proposal is provided at the request of The City of Ashland to replace their ZeeWeed® 500c membranes. This proposal is to replace one full train (260 modules) of the original installed modules. Pricing is based on guaranteed replacement pricing of CAD$1000/module which expires April 4, 2011 10 years from original purchase order date of April 5, 2001. The 3 year prorated warranty expired on October 16, 2005.

The plant is experiencing elevated turbidities related to fiber/urethane bond breakdown as a result of aggressive chlorination during membrane shutdown for approximately the first 5 years of operation.

2 Scope – GE 2.1 Membrane Module Supply

260 ZeeWeed® 500c DW membrane modules, 250 square feet

� Individually bagged, boxed and crated for ocean shipment. .

� No Cassette frames included. We have assumed that your current cassette frames can be used with the new membrane modules.

� Includes supply of associated cassette hardware as required:

� Cassette connection hoses, clamps, and camlocks should be replaced every 3 years. We have assumed that hoses, clamps, camlocks and camlock seals are in good condition and able to be reused.

2.2 Delivery Terms � CIP -Delivery will be on the basis of CIP The City of Ashland, Ashland, OR (Carriage and

Insurance Paid, INCOTERMS 2000). GE will manage clearance of the shipment through customs. Duties will be charged to The City of Ashland at cost in the final billing.

� Origin - Delivery of ZeeWeed® membranes originates from the GE Water & Process Technologies, ZENON Membrane Products (ZEM), Bláthy Ottó u 4, Oroszlány, 2840 Hungary facility.

� Temperature - UF membranes cannot be allowed to freeze and may require temperature-controlled freight and handling according to the season and the planned routing.

� Delivery Schedule - Delivery of membrane modules is typically 16 weeks after receipt of order. Definitive Membrane Module availability will not be confirmed until a Purchase Order is received from The City of Ashland and acknowledgement of a Purchase Order is issued by GE Water.


2.3 Membrane Module Warranty All GE membranes are supplied with a standard 2 Year Full Replacement Seller’s ZeeWeed® Membrane Module Warranty against manufacturing defects. For details of the warranty coverage on the membrane modules supplied, please see Section 8.

2.4 Installation and Assistance Not Included. GE recommends that a trained Field Service Representative assist with all membrane installation. Please request a quotation 60 days in advance of a planned installation.

3 Delivery Schedule Delivery of membrane modules is typically 14-18 weeks after receipt of order.

Membrane Module availability will not be confirmed until a Purchase Order is received from Client and acknowledgement of a Purchase Order is issued by GE Water.

4 Product Support One of the ways that GE has clearly distinguished itself from other membrane manufacturers is the range of services and support offered to our customers based on the many years of experience in UF membrane filtration. Included with any membrane replacement are the following services:

Local Support - GE has a global network of GE Water & Process Technologies service personnel that can deploy at short notice. These personnel have access to all the latest tools, procedures and equipment to provide the optimum assistance and support to plant operators.

Technical Support - For the life of each system supplied by GE, plant operators have telephone access to a skilled GE technical support specialist who will assist Plant Operators in troubleshooting of system problems during business hours.

Hours of Operation & Telephone Numbers

Daytime Hours of Operation:

Telephone, toll free in North America:

Telephone from outside of North America,

Email address for Daytime Hours:

8:30am to 5:00pm Monday to Friday, Eastern Time Zone GMT-5 1-866-271-5425

1 905-465-3030 and ask for Technical Support

[email protected]

5 Scope – Ashland � Clear shipment from Customs.

� Pay all applicable taxes, duty or tariffs. Currently US Customs is applying a 3.9% tariff on the import for membrane modules.

� Pay local sales tax.


� Receive, offload, handle and store membranes/cassettes at the plant prior to installation.

� Provide for all crane and forklift requirements.

� Cassette connection hoses, clamps, and camlocks should be replaced every 3 years. No requirement for hose or hose clamp replacements is anticipated. If these are required, this will be part of The City of Ashland’s scope.

6 Prices Adjustments

Guaranteed Replacement Price CAD$ 1000.00

Current USD:CAD Exchange Rate Aug 13 , 2010 0.9574

Exchange rate Factor 95.74%

CPI at April 2001 176.9

CPI at July 2010 218.011

CPI Factor 123.24%

Original module sq ft 220

Current module sq ft 250

Surface Area Factor 113.64%

Adjusted Price at August 13, 2010 USD$ 1,340.84

Bag, Box & Crate Fee 135.00

3.9% duty 57.56

Total Price Per Module 1,533.40

Total 260 398,684.00

Estimated Freight $31,000.00

All prices exclude sales tax

This quote assumes that the membranes being replaced were supplied under project # 500127. For final verification, Ashland will supply serial numbers of the replaced modules when installation is executed. If it is found that the replaced modules are not related to project # 500127, additional charges may apply.


7 Terms and Conditions of Sale A - Specific Terms and Conditions

1 Name

ZENON Environmental Corporation is the name of the legal entity providing services and is an affiliate of GE Water & Process Technologies Canada. Purchase Orders and Checks should be made out using the name ZENON Environmental Corporation.

Short Form:Short Form:Short Form:Short Form: Where a short reference is required in this document, for convenience, we are called simply GEGEGEGE.

2 Payment Terms

On approved credit, payment terms are Net 30 Days. Service Visits will be invoiced after a service is completed.

Membrane Invoices will be issued as follows:

25% with acceptance of Purchase Order

75% with shipping documents supplied to Carrier

3 Price Validity

Prices quoted are valid up to thirty (30) days after the date of issue of the proposal unless confirmed with a Purchase Order.

4 No Title to Process Materials

At no time will Seller be deemed to have taken title to Effluent Water, Influent Water, sewage sludge, Non-standard Substances, Hazardous Materials, harvested fibers or any other materials or substances processed at the site or treated by Seller pursuant to this Agreement. Seller does not take responsibility for or provide waste characterization, disposal facility selection, or disposal. The Buyer is responsible for all wastes and waste disposal from the plant. Wastes may include, but are not limited to water system reject waste, used RO or ultrafiltration membranes, clean-in-place related wastes and wastewaters, spent media, used granulated activated carbon, cartridge filters, equipment and consumables, lubrication/oil contaminated debris/rags, other maintenance related wastes, lab analysis residuals, and office waste.

5 Transfer of Title on Membrane Modules

Full title transfer on cassettes and membrane modules will be passed to the Ashland immediately upon shipment from the manufacturing plant of GE Water & Process Technologies.


B – General Terms and Conditions of Sale

1. Exclusive Terms and Conditions. Together with any other terms the parties agree to in writing, these Terms and Conditions of Sale form the exclusive terms (“Agreement”) whereby Buyer agrees to purchase, and Seller agrees to sell Goods and provide advice, instruction and other services in connection with the sale of those Goods (“Services”). Notwithstanding any provisions communicated in any way by Buyer to Seller prior to this Agreement including any terms contained in any request for quote by Buyer, Buyer agrees that this Agreement will control the relationship by accepting Goods and Services from Seller, even if Buyer sends to Seller other terms and conditions to which Seller may not respond. 2. Buyer Obligations. Seller will not control the actual operation of either Buyer’s systems or Goods at the site, and unless otherwise specifically agreed in writing, installation of Goods shall be the responsibility of Buyer. Goods and Services provided hereunder are based upon the information Buyer makes available to Seller, and Seller reserves the right to utilize the most compact and feasible design compatible with sound engineering practices, and to make changes in details of design, construction and arrangement of Goods unless precluded by limitations (including, but not limited to actual space and feedwater/substance quality specifications) specified by Buyer in writing at the time an order is placed. If no such limitations are specified, Seller shall not be held responsible for incompatibility of the Goods and Services due to changes in feedwater/substance quality specifications or site conditions nor for incompatibility with actual space or design limitations, which were not initially disclosed by Buyer and become apparent at a later date. For Services to be accurate and Goods to work as intended, Buyer must fulfill the following obligations (“Obligations”): (a) provide Seller complete and accurate information and data relevant to the scope of work to be provided, such as information related to Buyer’s site conditions, systems, related equipment and processes, feedwater or other substances to be treated or measured with the Goods, including any hidden, unapparent, or changing conditions that may affect the effectiveness of the Goods; (b) operate all related systems and the Goods within the agreed to control parameters or, if none, within industry customary operating conditions; (c) maintain all related systems and Goods in good operating condition and repair; and (d) maintain and handle Goods in a proper and safe manner. If Buyer fails to fulfill the foregoing Obligations, Seller shall be relieved of any obligations with respect to warranties or any other commitments made to Buyer in writing, and Seller shall have no liability for any loss, damage or injury which Buyer may sustain or for which Buyer may be liable. Buyer is solely responsible for the operation of Buyer’s systems, including ensuring that the systems are operated and maintained properly and comply with all laws, rules, regulations, license conditions and orders. Seller will not operate, inspect or maintain Buyer’s systems or act as a licensed operator as defined by local regulatory authorities. 3. Delivery. Title and risk of loss or damage to Goods as well as containers and tanks in which Goods are contained, except as provided for in section 8 of this Agreement, shall pass to Buyer upon delivery to carrier at designated shipping point. Delivery dates indicated by Seller are only approximate. Quotations and proposal drawings provided by Seller show only general style, arrangement and approximate dimensions and weight. 4. Payment and Prices. Unless otherwise specified in writing, payment is due net thirty (30) days from the date of Seller’s invoice. If Seller shall have any doubt at any time as to Buyer's ability to pay, Seller may decline to make deliveries except on receipt of satisfactory security. The prices quoted herein do not include taxes. Buyer shall be directly responsible, and reimburse Seller, for the gross amount of any present or future sales, use, excise, value-added, or other similar tax applicable to the price, sale of delivery of any products or services furnished hereunder. Buyer shall furnish Seller with evidence of exemption acceptable to the taxing authorities if applicable. For multi-year agreements, pricing stated shall remain firm for 12 months, after which Seller shall be entitled to adjust pricing upward on an annual basis according to the designated formula used by Seller in Buyer’s country and which shall be notified to Buyer. Unless otherwise specified, all prices are FOB point of shipment. Buyer agrees to reimburse Seller for collection costs, including 2% interest per month, should Buyer fail to timely pay. Buyer shall have no rights to any setoffs of any nature relating to any payments due under the Agreement. Notwithstanding the terms set forth herein or of any agreement or acceptance of Seller’s quotation, Seller reserves the right at any time and from time to time by notice in writing to the Buyer to (a) increase Prices (or impose temporary price adjustments) based on increases in the cost of base components for the Goods or Services provided, where the increase is due to increased global demand, limited supply, temporary product shortages, allocation of supply, or such other similar inflationary pressures; and (b) impose a surcharge equal to any increase in the cost of the Goods or Services as a result of a modification of exchange rates, taxes or other levies imposed by public authorities. 5. Payment for Excessive Usage; Lost and Damaged Goods. If payment for Goods is based on some factor other than the actual amount of Goods delivered (e.g., payment is for a fixed amount, or based on usage or production), then Buyer agrees to pay for all Goods (a) consumed as a result of Buyer’s failure to comply with Obligations as set forth in Section 2; or (b) lost or damaged after delivery to Buyer. Buyer shall provide Seller all information necessary to calculate amounts due and enable Seller to audit those records. 6. Consigned Goods. Buyer shall bear all risk of loss and damage to all consigned Goods in Buyer’s possession or control, notwithstanding Buyer’s exercise of reasonable care. Seller shall have the right to enter Buyer’s premises at all reasonable times to inspect such Goods and related records. Upon request, Buyer agrees to return such Goods to Seller pursuant to Seller’s shipping instructions. 7. Limited Warranties. Seller warrants that the Goods shall conform to published specifications and shall be free from defects in material and workmanship when at all times operated in accordance with Seller’s written instructions; and that the Services will be performed with the degree of skill which can reasonably be expected from a seller engaged in a comparable business and providing comparable services under comparable circumstances. Under no circumstances do Services include the operation, inspection or maintenance of Buyer’s systems or acting as a licensed operator as defined by local regulatory authorities. Unless otherwise provided in any Warranty Schedule that may be attached hereto, the foregoing warranties are valid: (a) for Chemicals, the earlier of, the shelf-life of the product, or 6 months from their date of delivery or the provision of Services; (b) for Consumables, including Filters and Membranes, 12 months from their date of delivery, (c) for Goods other than Chemicals and Consumables, the earlier of, 15 months from receipt, or 12 months from start-up/first use. Unless expressly agreed in a "Performance Warranty Document" signed between the parties on a separate basis, there is no performance warranty on Goods and Services or warranty on process results. For Goods not manufactured by Seller, the warranty shall be the manufacturer’s transferable warranty only. Any claim for breach of these warranties must be promptly notified in writing or the claim will be void. Seller’s sole responsibility and Buyer’s exclusive remedy arising out of or relating to the Goods or Services or any breach of these warranties is limited to, at Seller’s option: (a) replacement of non-conforming Goods or refund of purchase price of the non-conforming Goods; and (b) re-performance of the Services at issue, or a refund of the amount paid for the Services at issue. No allowance will be made for repairs or alterations made by Buyer without Seller's written consent or approval. Goods may not be returned to Seller without Seller's written permission. Seller will provide Buyer with a "Return Material Order" number to use for returned goods. Buyer, as the original purchaser, is not entitled to extend or transfer this warranty to any other party. The foregoing warranties are in lieu of and exclude all other warranties, statutory, express or implied, including any warranty of merchantability or of fitness for a particular purpose.

8. Use of Equipment, Tanks, and Containers. Semi-bulk containers (SBCs) owned by Seller shall be used only for the storage of Goods approved by Seller and Buyer shall return to Seller all SBCs owned by the Seller in an "empty " condition, as defined by appropriate transport or environmental regulations. Title to, and risk and ownership of, all equipment, product containers (e.g., pails, drums, recyclable intermediate bulk containers "IBC"), and tanks supplied to Buyer shall pass to Buyer as provided for in Section 3 of this Agreement, except that returnable SBCs shall remain property of Seller, unless otherwise stated in Seller’s documentation. 9. Compliance with Laws; Permits. Buyer is responsible for compliance with all laws and regulations applicable to the operation of its systems and to the storage, use, handling, installation, maintenance, removal, registration and labeling of all Goods from and after Buyer’s receipt of the Goods, as well as for the proper management and disposal of all wastes and residues associated with the Goods (including but not limited to containers, excess or off-spec product, testing wastes (e.g., spent or expired lab reagents and test kits) and signing manifests for waste transport and disposal.. Buyer agrees to ensure that all Goods and Services provided to Buyer for export are exported only in compliance with applicable export control laws and regulations. Permits and licenses which are required to operate apparatus or equipment or to use the Goods, shall be procured by Buyer at Buyer’s sole expense. Buyer shall be responsible for and procure all permits, licenses, exemptions, authorizations and approvals necessary to the operation of its systems, including but not limited to permits related to liquid and solid waste handling and discharge, air and water emissions, sound, safety, etc. Seller shall not be liable if any such permit, license, exemption, authorization or approval is delayed, denied, revoked, restricted, violated or not renewed and Buyer shall not be relieved thereby of its obligations to pay Seller in accordance with this Agreement. 10. Force Majeure. Neither party will be responsible to the other (and no event of default will be deemed to have occurred) if uncontrollable events make it impracticable or commercially unreasonable for either party to perform under the terms of this Agreement, provided no force majeure shall apply to Buyer’s obligation to pay in a timely manner for Goods and Services. Scheduled delivery dates are subject to extension when a force majeure event occurs. 11. Confidentiality and Intellectual Property. Both parties agree to keep confidential the other party’s proprietary non-public information, if any, which may be acquired in connection with this Agreement. Buyer will not, without Seller’s advance written consent, subject Goods to testing, analysis, or any type of reverse engineering. Seller retains all intellectual property rights including copyright which it has in all drawings and data or other deliverables supplied or developed under this Agreement, subject to Buyer’s right to use such drawings and data for its own use without additional cost. Buyer acknowledges that Seller is in the business of selling the Goods subject to this Agreement and agrees that it will not file patent applications on the Goods, or processes and methods of using the Goods, without Sellers express written permission. Buyer further agrees that in any event any such patents will not be asserted against Seller or its customers based upon purchase and use of such Goods. Buyer shall be fully liable for any infringement of patent rights of third parties arising out of the products supplied hereunder where the construction, and other characteristics of such products including modification of the Goods and Services, is prescribed to the Seller, or completed independently, by the Buyer or agent(s). Buyer shall fully defend and indemnify the Seller in case of such claim(s). Any software Seller owns and provides pursuant to this Agreement shall remain Seller’s property. Seller provides to Buyer a limited, non-exclusive and terminable license to such software for the term of this Agreement. Buyer agrees not to copy, sub-license, translate, transfer, reverse engineer, or decode the software. Unless otherwise expressly agreed by Seller, this license shall terminate and the software shall be returned to Seller upon termination of this Agreement, or the material breach of the terms in this section. Buyer shall defend and indemnify Seller in respect of any claim or liability suffered by Seller in connection with infringement of any third party rights based on design, specifications or requirements prescribed by Buyer or its agent. 12. Limitation on Liability. Except where expressly communicated to Seller, Seller shall have no liability for incompatibility of Goods with Buyer’s actual space or design limitations. To the extent permitted by law, the total liability of the Seller for all claims arising out of or relating to the performance or breach of this Agreement or use of any Goods or Services shall not exceed the annual contract value of this Agreement. Seller shall not be liable for any advice, instruction, assistance or any services that are not required under this Agreement or for which Seller does not charge Buyer. In no event will either party be liable to the other for lost profits or revenues, cost of capital or replacement or increased operating costs, lost or decreased production, claims of Buyer’s customers for such damages or any similar or comparable damages, or for any incidental, special, consequential or indirect damages of any type or kind, irrespective of whether arising from actual or alleged breach of warranty, indemnification, product liability or strict liability, or any other legal theory. If Buyer is supplying Seller’s Goods or Services to a third party, Buyer shall require the third party to agree to be bound by this clause. If Buyer does not obtain this agreement for Seller’s benefit for any reason, Buyer shall indemnify and hold Seller harmless from all liability arising out of claims made by the third party in excess of the limitations and exclusion of this clause. 13. Conflicts; Survival, Assignment. If there is any conflict between this Agreement and any written proposal or quotation provided by Seller, then the terms and conditions set forth in the proposal or quotation shall prevail. If any term or condition of this Agreement or any accompanying terms and conditions are held invalid or illegal, then such terms and conditions shall be reformed to be made legal or valid, or deleted, but the remaining terms and conditions shall remain in full force and effect, and the Agreement shall be interpreted and implemented in a manner which best fulfills our intended agreement. This Agreement may only be assigned by Seller to any affiliate. 14. Termination and Cancellation. This Agreement and any performance pursuant to it may be terminated or suspended by either party if the other party (a) is the subject of bankruptcy or insolvency proceedings; or (b) defaults in its material obligations under this Agreement, and such default is not cured within thirty (30) days. Upon the termination of this Agreement: (a) Buyer agrees to pay for all Goods in Buyer’s possession or for which title has passed to Buyer, at current prices or at such other prices as have been agreed to in writing; and (b) all amounts owing, if any, for the equipment or tanks relating to those Goods shall immediately become due and shall be paid within thirty (30) days of receipt of an invoice. In the event of cancellation of an order by Buyer, a cancellation charge will be made against the Buyer, in proportion to the work completed by Seller, or obligated against the order, plus any cancellation charges assessed against Seller by Seller’s suppliers. 15. Governing Law and Dispute Resolution. This Agreement shall be governed by the substantive laws of the State of New York. The UN Convention on the International Sale of Goods shall not apply. In the event of a dispute concerning this Agreement, the complaining party shall notify the other party in writing thereof. Management level representatives of both parties shall meet at an agreed location to attempt to resolve the dispute in good faith. Should the dispute not be resolved within thirty (30) days after such notice, the complaining party shall seek remedies exclusively through arbitration. The seat of arbitration shall be the federal district court in Philadelphia, PA,, and the rules of the arbitration will be the Commercial Arbitration Rules of the American Arbitration Association, which are incorporated by reference into this clause.


8 Seller’s Warranty - ZeeWeed® Membrane Modules 2 Year Full Replacement

This schedule sets out the warranty with respect to ZeeWeed® Membrane Modules (“Membrane Modules”). No other warranties, expressed or implied are made in connection with the sale of these products, including, without limitation, warranties as to fitness for any particular purpose or use or merchantability of these products. The warranty provided herein will be the exclusive and sole remedy of the Customer, and in no event will the Seller be liable for any special, direct, indirect or consequential damages, including, without limitation, loss of profits. This warranty is not transferable.

1 Product

This warranty applies to only the Membrane Modules supplied under the Contract of Sale. Membrane Module means a complete Membrane Module. This warranty does not cover air piping to the Membrane Module, permeate piping from the Membrane Module, piping connection fittings, connecting hardware and cassette frames with their associated components including but not limited to spacers, aerator tubes, aerator assemblies, screen, module dummies or module blanks.

Identification: Membrane Modules are shipped by the Seller with a serial number identification which confirms their place in the cohort set of Membrane Modules covered by this Membrane Module warranty.

2 Seller

GE Water & GE Water & GE Water & GE Water & Process Technologies Canada Process Technologies Canada Process Technologies Canada Process Technologies Canada is the name of the Seller and is the Seller offering this warranty. The Seller may assign this warranty to other GE affiliates.

3 Customer

Customer means the City of Ashlandthe City of Ashlandthe City of Ashlandthe City of Ashland

4 Project

Project means purchase of the membrane modules as outlined in this proposal # 42377063

5 Contract of Sale

Contract of Sale means the sales contract governing the sale of Membrane Module(s) between the Customer and the Seller or its GE affiliate.

6 Scope of Warranty

The Seller warrants that its Membrane Module(s) will be free of defects due to faulty materials or errors in manufacturing workmanship.

Regular Membrane Module inspection and normal fiber repair shall be the responsibility of the Customer.

All replacement Membrane Modules will be shipped on the basis of INCOTERMS 2000 EXW GE Manufacturing facility.

All ancillary costs including but not limited to bagging, boxing, crating, freight, freight insurance, applicable taxes, import duties, brokerage, receiving, forklift services, storage at site, re-attachment hardware, hose/clamp/camlock replacement, crane services, installation, fiber repair materials, glycerin flushing, commissioning and waste disposal are the responsibility of the Customer.

Full ReplacemenFull ReplacemenFull ReplacemenFull Replacement t t t – Full Replacement means that in the case of a valid warranty claim for a Membrane Module failure, the Customer receives a replacement Membrane Module and does not pay for the value of use of the Membrane Module prior to failure.

7 Warranty Start Date

This warranty will start on the earlier of:

a) The date that installation of the original Membrane Module(s) has been substantially completed, or


b) Six months from the date of shipment of the original Membrane Module(s) to the Customer.

8 Warranty Duration

TTTTotal Warranty Durationotal Warranty Durationotal Warranty Durationotal Warranty Duration: a total of 24242424months months months months composed of a Base Period and an Extended Period.

Base Period with Full ReplacementBase Period with Full ReplacementBase Period with Full ReplacementBase Period with Full Replacement: 24242424 months months months months

All purchasers of ZeeWeed® Membrane Modules are entitled to this Base Period of Full Replacement warranty coverage without purchasing an extended Seller’s Warranty.

Extended Period with Full ReplacementExtended Period with Full ReplacementExtended Period with Full ReplacementExtended Period with Full Replacement: a total of 0 months 0 months 0 months 0 months following the Base Period

Replacement Membrane Modules are covered by warranty only to the extent of the warranty of the original Membrane Module which has been replaced. At all events, this warranty shall expire and be of no force or effect 24242424 months months months months following the Warranty Start Date.

9 Notification of Claim

All claims filed under this warranty shall be made in writing by the Customer within 30 days of identifying a defect.

The Customer shall provide the following information:

1) A description of the defect giving rise to the claim;

2) Photographs showing the manufacturing defect;

3) The serial number(s) of the Membrane Module(s) which is (are) the subject of the warranty claim; and

4) Operating data and repair history for the life of Membrane Modules which are the subject of a warranty claim.

10 Verification of Claim

After receipt of written notification of a defect, the Seller will promptly undertake such investigations as, in the Seller's opinion, are necessary to verify whether a defect exists. The Seller reserves the right to require additional data as necessary to validate claims. The Customer may, in the course of these investigations, be requested to return Membrane Module(s) to the Seller for examination. The Seller may also conduct reasonable tests and inspections at the Customer’s plant or premises. If the results of the investigation do not validate the defect claimed, the Customer will reimburse the Seller for all reasonable expenses associated with said investigation, including expenses for all tests, inspections, and associated travel.

11 Satisfaction of Claims

The Seller will have the right to satisfy claims under this warranty in a flexible manner. Such flexibility may include the repair of existing Membrane Modules or changes in operating protocols or Membrane Module replacement or by upgrading failed Membrane Modules with newer Membrane Module(s) that may embody design and efficiency improvements. The Customer consents to the supply of replacement Membrane Modules which may be of a different design than original Membrane Modules.

12 Operating Information

To maintain the Membrane Module warranty, membrane system operation records from initial start-up date until claim must be maintained by the Customer and made available to the Seller upon request. Records must be provided in sufficient detail to verify uninterrupted compliance with the Seller’s Operations and Maintenance Manual prepared by the Seller and supplied to the Customer as part of the Contract. At a minimum, operation data must include information on feed water quality, temperatures, flows, trans-membrane pressures, aeration rates, permeate quality, cleaning intervals, cleaning chemical concentrations, elapsed time since start-up, relevant analytical data and reporting of any screen bypass events.

The Customer shall maintain and share access to a single reference copy in electronic form of a Membrane Module map containing the history of activity by Membrane Module. The Customer shall log its procedures performed related to a Membrane Module including relocation of Membrane Modules, repairs, replacements and any other noteworthy events.

The Customer authorizes the Seller to conduct any reasonable review of operation and maintenance records or to inspect facilities where Membrane Modules are installed, upon reasonable notice to the Customer. Such reviews and/or inspections are intended to also assist the Seller and the Customer in detection of membrane system faults and to optimize the care and operation of the Membrane Modules.


13 Limitation of Warranties

Occurrence of any of the following as reasonably determined by the Seller will void this warranty:

a. A material failure to operate the membrane system in accordance with Seller’s Operations and Maintenance Manual supplied to the Customer as part of the Contract, including material failure to adhere to the Seller’s specified Membrane Module cleaning procedures and the use of anything other than Seller-approved Membrane Module cleaning agents.

b. Failure to adhere to the preventive maintenance program as presented in the Seller’s Operations and Maintenance Manual.

c. Failure to ensure correct operation and/or functioning of the screening equipment.

d. Introduction of destructive foreign materials into the Membrane Module tanks. Destructive foreign materials may include natural or human-made materials that are introduced into the membrane system influent channel or tanks originating from construction and maintenance activities or from inadequate pretreatment or from aquatic species including clams and snails or from damage to the tank or tank coating. Sand and other materials that are naturally present in the influent will not be considered destructive foreign materials. The Customer shall be responsible to maintain correct function of the screen mechanism and to flush tanks of accumulated sand at the tank bottom.

e. Failure to install and maintain operating data acquisition and electronic data transmission functions at the plant.

f. Physical abuse or misuse, incorrect removal or installation of Membrane Modules by non-Seller personnel including fiber damage caused by operator error in handling of Membrane Modules or cassettes.

g. Unauthorized alteration of any components or parts originally supplied by the Seller.

h. Intentional damage.

14 Return Procedure

In the event that the return of a Membrane Module is required pursuant to this warranty, the Customer will first obtain a Return Goods Authorization (RGA) number from the Seller. Membrane Module(s) shipped to the Seller for warranty examination must be shipped freight prepaid. If the Customer desires temporary replacement Membrane Module(s) to replace those alleged to be defective and returned to the Seller for warranty examination, the Customer shall be responsible for the cost associated with any such replacements until examination of the returned Membrane Modules pursuant to this warranty is complete. Any Membrane Module examined by Seller as part of a warranty claim where the Membrane Module is subsequently found to be performing as warranted or where a Membrane Module failure is not covered under the warranty will be returned to the Customer, freight collect.

Doc. Control: JH Filename: City of Ashland - Membrane Replacement - 42377063 - August 16, 2010.doc Last Modified: 12/15/2009 8:45 AM

Technical Review:

Commercial Review: SH

8/17/2010 1:44 PM

Larry Rupp

From: Allen, Christopher1 (GE Power & Water) [[email protected]]Sent: Tuesday, July 20, 2010 1:09 PMTo: Glen Holdren; Larry RuppSubject: Ashland Tertiary Membrane Upgrades - Five Options (updated)

Page 1 of 3

8/5/2010

Glen and Larry,

Listed below are the finalized updates on all five of the membrane options for Ashland. The first three options have not changed from what I sent you on Friday. Options 4 and 5 have been added. Please note that Options 4 and 5 are now for complete, 4-train retrofits, whereas when we had done this evaluation a year-and-a-half ago these two options were only for one train. The reason we have done this now is that before we had been asked for a quick retrofit to increase peak capacity. Now I believe the question is what are the best upgrades for the membrane system as a whole given that it has been operating for over 8 years (commissioned May 2002). As such, it doesn't make sense to only upgrade one train for Options 4 and 5.

After reviewing this let's plan on getting together to discuss over the phone. As I said before, I will be in Boise in a few weeks and would be happy to swing by and discuss this project in more detail.

Option #1: ZW500C-250 (26 Module/Cassette). Represent 14% overall increase of membrane surface area.

a. Replace all existing ZW-500C-220 (220sf) modules with ZW-500C-250 (250sf) modules. Total 936 new modules will be installed. Keep all existing cassettes and other plant equipment.

b. Resultant flow: 3.2 MGD ADF, 4.0 MGD PHF. c. Estimated cost: $1.75 MM. d. Note - This is essentially a like-for-like replacement and includes membrane packaging, freight (delivery to

site), and installation assistance included. This cost does not include any blower capacity changes. That is the intent of Note 4 below.

Option #2: ZW500D-340 (20 Module/Cassette). Represent 19% overall increase of membrane surface area.

a. Replace all existing ZW-500C-220 (220sf) modules and cassettes with 20 module cassettes installed with ZW-500D-340 (340sf) modules. Total of 40 cassettes with 800 modules will be installed. Keep all other plant equipment.

b. Resultant flow: 3.3 MGD ADF, 4.0 MGD PHF. c. Estimated cost: $2.1 – $2.5 MM.

Option #3: ZW500D-440 (20 Module/Cassette). Represent 45% overall increase of membrane surface area.

a. Replace all existing ZW-500C-220 (220sf) modules and cassettes with 20 module cassettes installed with ZW-500D-440 (440sf) modules. Total of 40 cassettes with 752 modules will be installed. Add two additional backpulse pumps. Keep all other plant equipment.

b. Resultant flow: 4.0 MGD ADF, 4.0 MGD PHF. c. Estimated cost: $2.3 – $2.7 MM.

Option #4: ZW500D-340 (64 Module/Cassette) four train retrofit option. Represents 90% increase of membrane surface area.

a. Replace all existing ZW-500C-220 modules and cassettes within the four existing trains with 64 module (ZW500D, 340sf) cassettes. This would result in 5 new cassettes per train, for a total of 20 new 64-module cassettes. The four existing ZW500C-250sf cassettes (1 per train), installed in 2006, would remain. Upgrade header piping, cassette support beams and hardware. Replace permeate, reject, backpulse, and DIP tank recirculation pumps. Adjust blower capacity. Keep all other plant equipment.

b. Resultant flow: 5.3 MGD ADF, 7.6 MGD PHF. c. Estimate cost: $4.4 - $4.8 MM.

Option #5: ZW500D-440 (64 Module/Cassette) four train retrofit option. Represents 146% increase of membrane surface area.

a. Replace all existing ZW-500C-220 modules and cassettes within the four existing trains with 64 module (ZW500D, 440sf) cassettes. This would result in 5 new cassettes per train, for a total of 20 new 64-module cassettes. The four existing ZW500C-250sf cassettes (1 per train), installed in 2006, would remain. Upgrade header piping, cassette support beams and hardware. Replace permeate, reject, backpulse, and DIP tank recirculation pumps. Adjust blower capacity. Keep all other plant equipment.

b. Resultant flow: 6.8MGD ADF, 9.9 MGD PHF. c. Estimate cost: $4.7 - $5.1 MM.

Please note:

1. The PHF of 4.0 MGD for option #1, 2 and 3 are limited by the hydraulic capacity of the existing equipment and pipe sizing. As a result, we have optimized the number of modules required within each train to ensure that excess modules are not being provided given that there are hydraulic limitations. Essentially, providing more membranes in these options without increasing equipment or pipe capacity would not increase effluent flow.

2. All above options require further validation to confirm feasibility with regards to clearance requirements for cassette replacement and maintenance, as well as existing structural capacity.

3. The existing plant is hydraulically limited to the current peak flow (i.e.: permeate pump size, line sizes, etc.). That is why when the membrane surface areas increase there is no change to the peak capacity.

4. Some adjustment for existing facilities may apply. Further details to be confirmed at a later stage. 5. The City installed 4 additional cassettes (1 per train) with ZW-500C-250 (250sf) modules in 2006. As a

result, we have assumed they would only need to replace a total of 936 modules for Option 1. Details of the 936 modules are: 4 trains x 9 cassettes/train x 26 modules/cassette.

6. The cost for modifying blower capacity for Options #2 and #3 has been included in the estimated price. 7. Delivery for 20 module cassettes with ZW-500D-340 (340sf) modules or ZW-500D-440 (440sf) modules is

currently estimated to occur in Q4 2010. Please see the attached 500D cassette factor sheet for your reference on these cassettes.

8. For Option #3, we have included for each train 8 fully-filled cassettes and 2 cassettes populated with 14 modules per cassette (thus, 8X20+2X14) to get the 4 MGD ADF. This results in a 48 module savings for the plant.

9. Options 4/5 involve removing all of the existing cassettes and hardware from each train, including beams, headers, pumps, I/C piping, etc. This is a major rework exercise that would involve significant cost outside of our scope of supply and not included in the cost range shown. This rework is not required for Options 1/2/3.

10. Larger size DIP tanks are required (and provided by Others) for Options #4 and #5. The estimated new volume of the DIP tanks for both Citric Acid and Sodium Hypochlorite is approximately 4,500 gallons. The volume of the existing DIP tanks for both chemicals is 1,500 gallons.

11. Options #4 and #5 increase the MDF/PHF capacity because membrane surface area is being added and modifications are also being made to the pumps, blowers and pipe sizes. Options 1, 2 and 3 could also increase the MDF/PHF if pump and pipe size modifications were accounted for.

Chris Allen, P.E. Northwest Regional Manager GE Water & Process Technologies T +1 503 471 1453 M +1 503 307 2238 F +1 503 471 1401 [email protected] 121 SW Salmon Street, Ste 1100

Page 2 of 3

8/5/2010

Portland, OR 97204 GE imagination at work

Page 3 of 3

8/5/2010

Ashland - Membrane Replacement – 2nd Train ©GE November 3, 2011 204523 Page 1 of 14

Membrane Replacement Proposal

3239 Dundas Street West,

Oakville, Ontario, Canada L6M 4B2

Tel: 905 465 3030 Fax: 905 465 3050

To: City of Ashland, OR

referred to here as Ashland or Buyer

Date: November 3, 2011

No. of Pages: 14 including cover

Attention: David Gies, Water Reclamation Supervisor Email: [email protected]

Address:

20 E. Main Street

Ashland, Oregon 97540

USA

Telephone No.: 541 552 2335

Fax No.: 541 552 2364

From:

Laura Black

Regional Lifecycle Manager,

Western USA

Email: [email protected]

Telephone No.:

Cell No.:

905 465 3030 x3715

Cell 905 4643038

Fax No.: 905 465 3050

Cc: Scott Hortop, Ed Coulter, Julie Hatch

Subject: Membrane Replacement – 2nd Train Modules

Proposal No.: 204523

Original Project No.: 500127

C o m p a s s N o . : 331558

Plant: Ashland Waste Water Treatment Plant, Municipal Waste Water-Tertiary Treatment, 500c, 4 trains, 10 cassettes per train, 26 modules per cassette, total module count = 1,040, Substantial Completion Date Oct 17, 2002, No current Warranty or GMRP applicable.


Table of Contents

1 Background ............................................................................................................................ 3

2 Scope – GE ............................................................................................................................... 3

2.1 Supply Membrane Modules ............................................................................................................... 3

2.2 Membrane Module Warranty ........................................................................................................... 3

2.3 Delivery ....................................................................................................................................................... 3

3 Scope - Ashland ..................................................................................................................... 4

3.1 Maintenance Notes for Replacement Membranes ................................................................. 4

3.2 Installation Preparation ....................................................................................................................... 5

3.3 Installation ................................................................................................................................................. 5

4 Product Support ..................................................................................................................... 6

5 Prices........................................................................................................................................ 7

6 Terms and Conditions of Sale.............................................................................................. 7

7 Seller’s Warranty - ZeeWeed® Membrane Module 2 Year Full Replacement ......................................................................................................................... 11

8 Signed Agreement ............................................................................................................... 14

GE Water and Process Technologies as Seller submits the information contained in this document for evaluation only by Buyer. Buyer agrees not to reveal its contents except to those in Buyer’s organization as is necessary for evaluation. Copies of this document may not be made without the prior written consent of Seller’s Management. If the preceding is not acceptable to Buyer, this document shall be returned to Seller.

This proposal has been issued, based on the information provided by Buyer and currently available to GE Water at the time of proposal issuance. Any changes or discrepancies in site conditions, including but not limited to changes in system influent water characteristics, changes in Environmental Health and Safety conditions, changes in Buyer financial standing, Buyer requirements, or any other relevant change or discrepancy in the factual basis upon which this proposal was created may lead to changes in the offering, including but not limited to changes in scope of service, pricing, guarantees, quoted specifications, or terms and conditions.


1 Background The City of Ashland is preparing to replace the original 500c-220 sq.ft, modules in the 10 cassettes of Train # 2 with a comparable membrane module. At this time Ashland have declined the option of purchasing new hose lines (permeate and aeration) and on-site FSR assistance.

Currently GE is able to provide a ZeeWeed® 500c membrane module with increased surface area (13.5%) over the current membranes in service (250 sq.ft. vs. 220 sq.ft.).

The advantages of the increased surface area are:

� It allows the plant to operate the membranes at a reduced flux rate while maintaining flows which can result in longer periods between cleans (reducing nonproductive down-time) and may increase length of overall time in service due to decreased operational stresses on the modules, or,

� It allows the plant to operate the membranes at the same flux rate while providing increased flows.

2 Scope – GE 2.1 Supply Membrane Modules

Supply 260 ZeeWeed® 500c 250 sq. ft. Membrane Modules, individually bagged, boxed and crated ready for ocean shipment.

2.2 Membrane Module Warranty These ZeeWeed® Membrane Modules are supplied with a base 2 year Full Replacement Seller’s Warranty against manufacturing defects. For details of the warranty coverage on the membrane modules supplied, please see Section 7.

2.3 Delivery � CIP - Delivery will be on the basis of CIP Ashland WWTP, Ashland, OR, Incoterms® 2010.

CIP = Carriage & Insurance Paid. Partial shipment will be acceptable unless otherwise specified.

� Origin - Delivery of ZeeWeed® membranes originates from the GE Water & Process Technologies, ZENON Membrane Products (ZEM), Bláthy Ottó u 4, Oroszlány, 2840 Hungary facility.

� Export Documents - All ZeeWeed® membrane module shipments into the USA require clearance documentation from the EPA. GE Water will prepare and provide the required EPA documentation to the Carrier.

� Taxes and US Duty - A US Customs duty of 3.9% applies to all ZeeWeed® membranes. This duty alone is included in the price table and will be remitted by GE. Any other duties


imposed are the responsibility of Buyer. Any applicable sales or value added tax is not included. All applicable Local, Provincial, or Federal taxes are the responsibility of Buyer.

� Temperature - UF membranes cannot be allowed to freeze or overheat and may require temperature-controlled freight and handling according to the season and the planned routing.

� Availability - Delivery of membrane modules is typically 20 weeks after receipt of order. Definitive Membrane Module availability will not be confirmed until a Purchase Order is received from Buyer and acknowledgement of a Purchase Order is issued by GE Water.

3 Scope - Ashland 3.1 Maintenance Notes for Replacement Membranes

At the time of any full plant or full train membrane replacement, it is recommended to evaluate the appropriate timing of repairs or replacement of the following ancillary system components:

� Is it the right time to address any tank coating repairs which may be required?

� Is it the right time to replace non-metal cassette components?

� Are any of the hoses, clamps, camlocks, camlock seals and couplings due for replacement?

Preferential Flow

Preferential flows can create a risk of over-fluxing of new modules when they are installed in the same train with older modules. The mixing of old and new modules in the same cassette also makes management of slack adjustment more difficult. GE Water recommends that Buyer plan membrane module replacement on a complete cassette and complete train basis wherever possible to achieve both optimal performance and best value from the new membrane modules. By replacing all 260 membrane modules (10 cassettes of 26 membrane modules each) in Train #2 of Ashland WWTP, this risk has been neutralized.

Membrane Slack

GE’s membranes are supplied and shipped with an initial factory fiber slack designed to optimize membrane air scouring during operation as well as accommodate a degree of shrinkage. Membranes shrink in length early in their lifecycle when exposed to higher temperature water. The pace of shrinkage slows with age. With the installation of new membranes, the requirements for slack adjustment start a new cycle.

Due to the wide variety of operating environments in which our products can be utilized, it is difficult to generally predict the rate of shrinkage. If membranes operate in a condition of insufficient slack for an extended period of time, irreversible damage to the fiber-urethane bond may occur. Please refer below to the recommended inspection frequencies based on your plant’s membrane tank operating temperature. Visual inspections should begin during the membrane installation and be repeated over time on the same cassette. Digital pictures will allow for comparative analysis of the fiber slack over time.


Maximum Operating Temperature Recommended Slack Inspection Frequency

0-24 deg C / 32-76 deg F Every 2 years

25-30 deg C / 77-86 deg F Once Per Year

>30 deg C / > 86 deg F Twice Per Year

3.2 Installation Preparation � Receive, off-load, handle and provide temperature controlled storage of the equipment

and materials required for Seller to perform the duties outlined in the Seller’s Scope of Supply.

� Membrane Membranes must be stored in a sheltered area, protected from freezing, direct sunlight or extreme heat, and sealed as shipped until ready for use. Storage should be in a dark, dry, level area at a temperature of 5-30°C (41-86°F). Membranes should not be stored longer than necessary prior to installation. Buyer is responsible for risk of loss of Seller’s parts while in storage at the plant.

� Inspect, evaluate and make repairs as required for the membrane tanks, mounting brackets, hoses and all connections prior to GE Water arriving at site.

� Provide all access structures such as scaffolding) and mechanical lifting equipment including cranes, forklifts and scissor lifts.

� Assure availability of a copy of the Operating Manual, all Process and Instrumentation Drawings, and all Electrical Drawings on site and accessible for reference.

3.3 Installation � Isolate cassette(s) from the rest of the system as required,

� Remove cassettes from the system as required.

� Clean each cassette as it is removed from the system.

� Place new modules into each cassette.

� Return the cassette to the system and re-commission cassette when able.

� Dispose of membrane module preservative as well as all retired membrane modules and cassette components.

� Dispose of shipping and packaging materials unless specifically requested not to by GE.


4 Product Support One of the ways that GE Water has clearly distinguished itself from other membrane manufacturers is through the range of services and support offered to our customers based on the many years of experience in UF membrane filtration. Included with any membrane replacement are the following services:

Local Support - GE Water has a global network of GE Water & Process Technologies service personnel that can deploy at short notice. These personnel have access to all the latest tools, procedures and equipment to provide the optimum assistance and support to plant operators.

Technical Support - For the life of each system supplied by GE Water, plant operators have telephone access to a skilled GE Water technical support specialist who will assist Plant Operators in troubleshooting of system problems during business hours.

Technical Support - Hours of Operation & Telephone Numbers

Daytime Hours of Operation:

Telephone, toll free in North America:

Telephone, outside of North America:

Email address for Daytime Hours:

8:30am to 5:00pm Monday to Friday, Eastern Time Zone GMT-5 1-866-271-5425

1 905-465-3030 and ask for Technical Support

[email protected]

ZeeWeed® Users Group - As an on-going support to ZeeWeed® plants, an annual 2 day ZeeWeed® Users Group meeting is organized by GE Water consisting of formal meetings and a tour of the hosting ZeeWeed® plant. New technologies are introduced, current issues are tabled, and roundtable discussions ensue. The Users Group has become an excellent forum for experienced operators to keep current, to renew old acquaintances, to exchange the “tricks of the trade” with each other, and to impart their hard-won knowledge to newer ZeeWeed® operators. Generous hospitality combines with informal experiences and exercises to enhance the esprit de corps between domestic and international plant operators.

All ZeeWeed® plants are invited to send operators representing the plant. GE Water covers conference, food, and hospitality expenses. The plant must cover the operator’s travel and hotel expenses, and a small conference fee. GE Water supports this forum to facilitate interaction between ZeeWeed® Plant Operators and to provide a forum for real-world feedback to GE Water’s management, design and operations staff.


5 Prices

Qty Item

Total Price

USD $

260 Supply ZeeWeed 500c - 250 sq.ft. Membrane Modules p/n 850133

480,203.00 1 Freight based on single stack shipment, and Insurance. CIP Oakville to Ashland, OR, Incoterms® 2010.

1 3.9% Customs Duty on ZeeWeed Membranes

6 Terms and Conditions of Sale A - Specific Terms and Conditions of Sale

1 Legal Entity for Contracting

ZENON Environmental Corporation is the name of the legal entity providing services and is an affiliate of GE Water & Process Technologies Canada. Purchase Orders and Checks should be made out using the name ZENON Environmental Corporation.

Short Form: Where a short reference is required in this document, for convenience, we are called simply GE Water.

2 Payment Terms

On approved credit, payment terms are Net 30 Days and invoices will be issued on the following schedule:

� 30% with acceptance of Purchase Order. Shipment of membranes is contingent on receipt of initial milestone payment.

� 70% with membrane module shipping documents supplied to Carrier.

3 Price Validity

Prices quoted are valid up to thirty (30) days after the date of issue of this proposal unless confirmed with a Purchase Order.

4 No Title to Process Materials

At no time will Seller be deemed to have taken title to Effluent Water, Influent Water, sewage sludge, Non-standard Substances, Hazardous Materials, harvested fibers or any other materials or substances processed at the site or treated by Seller pursuant to this Agreement. Seller does not take responsibility for or provide waste characterization, disposal facility selection, or disposal. Buyer is responsible for all wastes and waste disposal from the plant. Wastes may include, but are not limited to water system reject waste, used RO or ultrafiltration membranes, clean-in-place related wastes and wastewaters, spent media, used granulated activated carbon, cartridge filters, equipment and consumables, lubrication/oil contaminated debris/rags, other maintenance related wastes, lab analysis residuals, and office waste.

5 Purchase Order Guidelines

Please ensure that your Purchase Order has covered the following points. This will ensure accurate and prompt order entry, product delivery, invoicing and accounts receivables processing and will prevent administrative delays for all parties.


� Legal Entity - Please be sure your Purchase Order is issued in the name of the specific GE legal entity issuing this proposal cited in Section 6, Item 1; Legal Entity for Contracting. We will be glad to work with your Purchasing department to set this entity up as an approved

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