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DATE: January 7, 2015 CONSENT AGENDA
SUBJECT: COGENERATION ENGINE/GENERATOR MAINTENANCE AGREEMENT
FROM: David H. Ready, City Manager
BY: Special Projects Coordinator
SUMMARY
The proposed action is to approve a ten (10) year maintenance agreement for the
cogeneration plant engine/generator set with Western Energy Systems.
RECOMMENDATION:
1. Approve a ten (10) year maintenance service agreement with Western Energy
Systems for the cogeneration plant engine/generator set in a form approved by
the City Attorney.
STAFF ANALYSIS:
The City has contracted with Opterra Energy Systems (formerly Chevron) to rebuild its
Municipal Cogeneration Plant. The work continues on the plant with an expected
completion date of late March early April 2015. The City has successfully owned,
operated and maintained cogeneration systems for more than thirty years. This new
plant will represent quite a departure from the City's previous experience in that the
equipment sophistication and size has greatly changed. The regulatory environment for
cogeneration plants has also greatly changed in that with the old plants the city had to
demonstrate compliance with air resources regulations twice each year, today that
compliance must be demonstrated on a daily basis via telemetry systems.
As the City prepares for the commissioning of the new plant, long term maintenance
agreements need to be negotiated and be put in-place. The original studies that led to
the decision to rebuild the plant contemplated that major equipment items such as the
engine/generator set and the chiller (see attached photos of the actual equipment)
would require outside maintenance agreements. In addition the emissions control
equipment would require technical maintenance as well as third party monitoring and
ITEM NO.__11 _
City Council Staff Report
January 7, 2015 Page 2
Cogeneration Long-term Maintenance Agreement
reporting to AQMD. The last full year that the City operated both of the Cogeneration
Plants the Facilities Maintenance Budget to maintain these plants was set at $755,868.
The agreement with Opterra contemplated that the City would receive some $125,000
in rebates for the various energy conservation efforts that were undertaken. That level
of rebate activity has been achieved and with some additional effort they have been
able to qualify the City for a $550,000 rebated from the Gas Company related to the
cogeneration plant engine. This rebate will be received over a five year period upon
completion of the plant. The rebate comes with the condition that the City put in-place a
ten (10) year major maintenance agreement for the engine/generator set with an
experienced third party vendor.
The engine/generator set that has been purchased for the City's plant is a 1.1Mw GE
Jenbacher and the west coast authorized maintenance contractor for the equipment is
Western Energy Systems. Western Energy Systems currently maintains over ninety
(90) Jenbacher engines in this region. The actual agreement with Western is based on
engine operating hours and calls for maintenance at 2,000 hour intervals with a major
engine rebuild in Year seven (7) of operation. Staff, with the assistance of Opterra has
negotiated an option in the agreement that after year five, should the City elect to carry
out its own maintenance, the agreement can be modified from the SILVER Program
agreement to a less costly Basic Program agreement. The SILVER Program for natural
gas engines is attached and clearly describes what is expected of the City in
performance it carries out as well as what the contractor will do.
The maintenance program would begin on the date that the City takes over the plant
operations from Opterra. That day occurs only after a thirty day startup period where
Opterra demonstrates full operational capabilities of the plant and all of its equipment.
FISCAL IMPACT:
The Silver agreement calls for an engine hour maintenance cost of $19.58 plus parts,
which when assuming 80% operating efficiency equates to an annual; maintenance cost
of $162,535. If at the end of year five the City elects to switch to the Basic plan the base
cost for annual maintenance drops to $74,519. In addition, in year seven (7) the major
engine overhaul occurs at a cost of $458,200. Both the annual (Silver Plan and Basic
Plan) and major overhaul cost items are escalated annually based on CPI (see attached
LTSA Annual Price Escalation Procedure) not to exceed 5% for the first three years and
then at CPI for the remainder of the term. A history of the last nine years of CPI change
is attached along with the calculation procedure. To cover the major maintenance in
Year seven it is recommended that the dollars coming in from the Gas Company rebate
be set aside in a reserve to fund this work. Funding for this long-term maintenance will
be budgeted in each successive fiscal year Cogen Operating budget.
The first full year of maintenance should commence on or about July 1, 2015 and the
funding for this agreement will be budgeted in the Cogen Fund in the 2015-16 budget.
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City Council Staff Report
January 7, 2015 Page 2
Cogeneration Long-term Maintenance Agreement
Allen F. Smoot, Special Projects Coordinator
David H. Ready, City M ager
Attachment:
1. Photos
2. Agreement/Proposal
3. SILVER Program
4. CPI Adjustment Procedure/History
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AGREEMENT
FOR MAINTENANCE OF
EQUIPMENT
BETWEEN
Western Energy Systems
a division of Penn Detroit Diesel Allison, LLC.
AND
FOR
WES7AWTJV
AU*V&=RGY SVSTEMM
Power Systems Specialists
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Table of Appendices
ANNEX 1 CERTAIN DEFINITIONS
ANNEX 11 LIST OF COVERED EQUIPMENT
ANNEX III DESCRIPTION OF COLD SERVICES AND MAINTENANCE SCHEDULE
ANNEX IV TECHNICAL INSTRUCTIONS
ANNEX V WES CERTIFICATE OF INSURANCE
ANNEX VI WES SCHEDULE OF CHARGES FOR NON-AGREEMENT
MAINTENANCE,REPAIR AND TESTING SERVICES
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MAINTENANCE AGREEMENT
This Maintenance Agreement(the "Agreement") is made and entered into on
, 201, by and between xxxxxxxxxx, with its principle place of business located
at xxxxxxxxxxxxxxxxx (the "Customer") and Western Energy Systems , a division of Penn
Detroit Diesel Allison, LLC, with its principle place of business located at 8330 State Road,
Philadelphia, PA 19136 (the "Contractor"). The Customer and/or the Contractor are sometimes
separately referred to as "Party" and collectively as "Parties".
BACKGROUND
The Customer owns certain power generation Equipment installed at its Facility. The
Customer and the Contractor are entering into this Agreement to set forth their respective
agreements and understandings as to certain maintenance services to be provided by the
Contractor to the Customer with respect to the Equipment.
NOW, THEREFORE, in consideration of the mutual promises and agreements set forth
in this Agreement, and intending to be legally bound hereby, the Customer and the Contractor
agree as follows:
1) CERTAIN DEFINITIONS
Capitalized terms used in this Agreement, and not otherwise defined, have the respective
meanings set forth in Annex I.
2) TERM
The Term of this Agreement shall commence on the Effective Date and shall end on the date
on which the Equipment has XXX Operating Hours (OPH) ("the Term"). The customer
represents and warrants to the Contractor that on the Effective Date the Equipment will not
have more than XXX OPH.
3) CONTRACTOR'S SERVICES
During the Term of this Agreement, the Contractor shall perform the following Services and
provide the following parts,tooling and consumables for the Equipment.
a) Maintenance Services. The Contractor will perform the maintenance services (the
"Services")to be provided, as specifically described in Annex III. Such Services shall be
coordinated with the Customer and to the extent applicable, scheduled in advance.
b) Parts, Tooling and Consumables. The Contractor will provide all parts, tooling and
consumables necessary to perform and complete the described Services. The Contractor
will maintain adequate inventories and supplies necessary or required to ensure that an
adequate supply of expendable parts is readily available. Such parts shall either be new,
unused and either manufactured by the original equipment manufacturer or otherwise of
comparable quality, or remanufactured to a condition and level of quality comparable to
new and unused parts.
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c) Provided the Customer purchases,pays for and installs the necessary monitoring
equipment, the Equipment will be remotely monitored by the Contractor to observe
operating parameters and performance and shall be connected to monitoring systems so
as to notify the Contractor in the event of a malfunction of the monitored devices. Upon
receiving any such malfunction notification, the Contractor shall contact the Customer to
review the malfunction. If necessary,the Contractor will dispatch service personnel to
the Facility in a timely manner.
d) Non-Scheduled Response Time. The Contractor shall use its best efforts to respond to
calls for assistance and non-scheduled repairs within four (4) hours of the Customer's
initial request. Such Customer requests may be oral, electronic, or in writing and, if oral,
must be followed up in electronic or written form.
e) Oil. The Contractor shall perform engine and gearbox lube oil changes, with Customer
provided lube oil, provided that the lube oil changes take place at 2000 OPA intervals.
Increased frequency of lube oil changes due to fuel gas quality or lube oil contamination
resulting from Customer operations or cause shall be considered additional to this
Agreement and shall be subject to additional labor charges as provided for herein.
f) Exclusions. The Contractor shall not be required to perform any Services caused or
necessitated by the following unless specifically authorized in writing by the Customer
with charges for such maintenance and repair Services as provided in Annex VI.
i) Maintenance, parts, labor, freight, or services of any type not specifically included in
Annex III.
ii) Increased quantities of spark plugs, filters or other maintenance and repair parts
required as a result of Customer or third party maintenance, fuel gas quality, outside
mechanical or electrical forces.
iii) Negligent acts or intentional misconduct by any Person or Persons other than the
Contractor's personnel or subcontractors that impairs the operation of the Equipment.
iv) Damage to the Equipment or, any components associated with the Equipment because
of fire, theft, or other risks now or hereafter normally covered by an "all risks"policy
of insurance, including extended coverage.
v) The Customer's installation of additional equipment to the Equipment after the
Effective Date and without prior written approval of the Contractor.
vi) Operation of the Equipment by the Customer not in compliance with the Equipment
manufacturer's standard operating parameters or any project specific requirement.
vii)Repairs, adjustment, or maintenance caused by fuel gas quality not meeting the
manufacturer's requirements as specified in TI 1000-0300, fuel pressure fluctuations,
disturbances, disruptions, Customer's fuel supply or process.
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viii) Electrical fluctuations, disturbances, or disruptions, reasonably demonstrated by
the Contractor to not have been caused by the Equipment.
ix) Basic troubleshooting capable of being performed by the Customer, including visual
inspection, tightening of clamps, bolts, screws to stop small coolant or lube oil leaks,
tightening of wires and wire terminations should there be loose wires, refilling of lube
oil and coolant as required to maintain system, initial inspection of system warnings,
restarting of equipment after warnings or shutdowns, exchange of minor components,
and other similar minor type repairs not detrimental to safe operation of the
Equipment. A $500.00 deductible shall be charged for each corrected repair call that
should have been handled by Customer personnel.
x) Emissions Testing
xi) Additional costs incurred by Contractor for Services required for the Equipment,
resulting from Customer shutdown of the Equipment for a period of time equal to or
greater than three (3) months.
xii)Additional costs incurred by Contractor for Services required for the Equipment
resulting from improper or inadequate maintenance and/or repair services performed
by or on behalf of the Customer prior to the Effective Date.
xiii) Failures in installation or operation of non-Contractor provided or commissioned
components, interfaces, or equipment resulting in damages to Contractor provided
equipment covered by this Agreement.
xiv) Rigging and removal of Equipment for major repairs. These are defined as repairs
involving removal and replacement of the engine, generator, and gearbox for major
repairs during scheduled or corrective repair incidents.
xv)Assembly or disassembly of walls, building components, structures, roofs, equipment
or any other constraints to gain access to Equipment for performance of planned
maintenance, component replacement or corrective repairs.
g) Contractor's Conduct.
i) Contractor will perform its Services in a workmanlike, neat and orderly manner. The
Contractor will use reasonable efforts in performing the Services so as to avoid errors.
The Contractor shall take into account any and all applicable plans and/or
specifications furnished by the Customer to the Contractor.
ii) In performing the Services, Contractor's employees will work at all times in a safe
and workmanlike fashion conforming to the requirements of the Occupational Safety
and Health Act of 1970 (OSHA) and all other applicable federal, state, and local laws
and regulations relating to safety and health in providing such services. Customer
shall provide a work area conforming to said laws and regulations.
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iii) Contractor's employees shall be subject to Contractor's customary background
screening, drug, alcohol, and physical testing.
iv) The Contractor shall observe the Customer's project specific safety and security
policies, provided that these policies have been communicated to the Contractor in
writing.
v) The Contractor will take all reasonable and customary safety precautions in
connection with the work to be performed by, at, and around the Equipment. The
Contractor will give all notices and will comply with all notices and applicable laws
(including OSHA, if applicable) in connection with the performance of its services. If
either Party discovers a safety violation such Party will immediately notify the
responsible Party of such violation in writing except that no Party is obligated to
perform any work on the Equipment unless and until the safety violation is corrected.
4) OBLIGATIONS OF THE CUSTOMER
The Customer shall be responsible for the following:
a) To keep a daily operation log for the Equipment reflecting operation, inspections
and maintenance work, outside services and analytical reports.
b) To operate the Equipment in such a way the engines/modules (if more than one)
are working for nearly the same operating time in order to enable their
simultaneous maintenance.
c) To operate the Equipment only within the limits of the Technical Instructions and
the manufacturer's warranty provisions.
d) To not make or implement any changes or modifications of the operating
parameters of the Equipment except in case of an emergency to prevent damage
to persons and/or property. The Customer shall notify the Contractor in a
reasonable timeframe of any such changes or modifications.
e) To provide all oil and grease necessary for the operation and maintenance of the
Equipment.
f) To monitor lube oil levels on a daily basis, add lube oil as required, and ensure the
Equipment is not operated without required levels of lube oil. Carry out
individual lube oil samples using Contractor provided oil sample kits. The results
of the lube oil analyses must be forwarded to the Contractor promptly. All
makeup oil, oil changes, and lube oil samples must be recorded in the daily
operation log.
g) To carry out the disposal of used oil from the Equipment in a lawful fashion.
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h) To perform routine daily, weekly, and monthly maintenance and inspections as
called for in the manufacturer's maintenance schedule(s). These tasks are defined
as "independent of the number of operating hours".
i) To comply with all manufacturers' requirements for lubrication, lubrication
change intervals, installation parameters for equipment installed, cooling water
quality, anti-freeze and anti-corrosion compounds and fuel gas quality.
j) To provide all necessary fuel for operations. The fuel provided by the Customer
must meet all required fuel specifications for the Equipment.
k) To provide the Contractor promptly with fuel gas analyses, which must be carried
out by the Customer every three (3) months. The Contractor is not liable for
damages, repairs, or adjustments resulting from unacceptable fuel gas quality.
1) To provide Contractor, free of charge, a secured room suitable for storage at site.
m) To permit the Contractor to carry out scheduled maintenance and repair work
during normal working time from 7:30 a.m. to 5:00 p.m. from Monday to Friday.
n) To notify the Contractor in writing of any additional non-contract maintenance,
repair, or testing required and to permit the Contractor access 24 hours/day, 7
days/week in order for the Contractor to provide these non-contract maintenance,
repair, and testing services.
o) To provide all coolant for the Equipment. Coolant must meet manufacturer's
specifications.
p) To inspect and maintain coolant at required levels.
q) To provide all necessary permits and approvals for operation of the Equipment,
including but not limited to EPA identification numbers for disposal of used oil
and hazardous waste if required.
r) To provide all necessary utilities for operations of the Equipment including, but
not limited, to:
(i) Service electricity
(ii) Provide water of appropriate qualities for the different services at the site
(iii)Lighting.
s) To provide and maintain all necessary piping, wiring and equipment up to the
applicable terminal points of the Equipment.
t) To provide business and commercial interfaces with the electric utility and fuel
supplier(s).
u) To identify and provide contact data for emergencies 24-hours/day, 7-days/week.
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v) To provide telephone modem or Internet connections and communications
services for use by Contractor if remote monitoring is required or provided.
w) 24-hour, 7-day/week access to the system.
5) REMUNERATION
a) During the Term, the Customer shall pay to the Contractor for the Services
remuneration based on the actual operating hours of each engine/module included in
the Equipment at the rate of$xx.xx per operating hours (the "Base Rate"); provided
that the remuneration shall not be less than $xxxxxx.xx per calendar quarter.
b) The Parties understand that this Agreement is priced on the basis of certain minimum
expected operating hours during the Term of this Agreement. The defined yearly
minimum operating hours for this Agreement is 6656, 80 % of 8322 projected
operating hours. The Contractor shall have the right to invoice the defined yearly
minimum operating hours.
c) The Base Rate is based on the Contractor's 2013 price list. The Base Rate for each
calendar year, during the Term of this Agreement, shall be adjusted annually for the
average annual percentage change in costs through December 3 1" of the prior year.
Base Rate price adjustments shall be effective January 1 of each year, during the
Term of the Agreement, and shall be based on U.S. Bureau of Labor Statistics
(`B.L.S.") Import Price Indexes and the appropriate C.P.I. as noted below.
Price adjustments shall be calculated by the end of January, for the prior year, using
the defined B.L.S. indices. All price adjustments shall be effective January 1.
In the event the specified indices are discontinued by the B.L.S., the Parties shall
negotiate and agree upon reasonably equivalent indices for annual price adjustments.
The adjusted price shall be determined as follows:
Po =Base rate at close of current calendar year.
P =New price following adjustment effective January 1 of each year calculated as
follows:
55% M = Material, U.S. B.L.S., U.S. Import Price Indexes, Germany-Manufactured
Articles where; Mi = new January 1 period and Mo=previous January 1 period.
45% L = Labor, U.S. B.L.S. C.P.I., Western Urban-All Urban Consumers (Series ID
CUUROl00SAO) where; Li =new January 1 period and Lo= previous January 1
period.
All adjustments shall be made on a blended calculation, using the stated percentages
and references as follows; P = Po * (45% Li/Lo+ 55% Mi/Mo).
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Annual adjustments shall not exceed 5 %annually during the initial three (3) years of
the Term of this Agreement, not including changes in cost of lubricating oil if
included herein.
d) The Customer shall also pay (or reimburse the Contractor for) any and all Taxes
under any existing or future Laws imposed on the Contractor or as to which the
Contractor shall have any obligation to collect with respect to or relating to this
Agreement, the Services of the performance by the Contractor or any of the
obligations hereunder except only United States Taxes and State Taxes on or
measured by the net income of the Contractor.
e) Billing shall be made monthly and payment will be due thirty (30) days after the date
of the invoice subject to Contractor's credit approval. Without limiting the rights and
remedies available to the Contractor under this Agreement and applicable Law, all
payments not received by the Contractor within such thirty (30) day period shall, to
the extent permitted by applicable Law, bear a late charge of 1.8% per month on the
unpaid amount until paid in full. All payments shall be check or wire transfer as
decided by Customer. Credit card payments are specifically excluded
f) If during the Term of this Agreement, any new legislation, taxes, or regulations are
established relating to oil, used oil, or other waste removal requirements or fees the
Contractor shall be entitled to pass such charges on to Customer if such services form
a part of this Agreement.
6) INSURANCE
a) The Contractor shall provide and maintain insurance coverage as provided for in the
Certificate of Insurance enclosed with Annex V herein.
7) TEC14NICAL INSTRUCTIONS
a) The manufacturer(s) of the Equipment may from time to time revise the Maintenance
Schedule and/or Technical Instructions applicable to the Equipment. The Contractor
shall provide to the Customer copies of the latest editions of Maintenance Schedules
and/or Technical Instructions furnished to the Contractor by such manufacturer.
b) The Parties shall make good faith efforts to agree upon whether any such revised
Maintenance Schedule or Technical Instructions shall apply under this Agreement.
The Contractor shall be entitled to an equitable adjustment to remuneration to be paid
by the Customer under this Agreement in the event that any changes increase the cost
or expense to the Contractor of providing the Services.
8) ASSIGNMENT
Neither Party shall have any right or power to assign this Agreement in whole or in part nor
to delegate any of its obligations under this Agreement except in connection with the merger
of a Party or the sale of substantially all of a Party's assets and business or except with the
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prior written consent of the other Party, which consent shall not be unreasonably withheld.
Any attempted assignment without the required consent of the other Party shall be null and
void. Nothing contained herein shall restrict the Contractor from subcontracting portions of
its work, provided that the Contractor shall remain responsible to the Customer for the
performance by the subcontractor.
9) RESTRICTIONS
The following restrictions shall apply throughout the Term and for a three (3) year period
following the end or termination of the Term.
a) Neither Party will solicit or employ any of the employees of the other Party so long as
they are employed by such Party, and for a period of six (6) months following the
termination of their employment, without obtaining the prior written consent of the
respective Party.
10)TERMINATION
a) This Agreement may be terminated prior to the end of the Term only as follows:
i) By the Customer and the Contractor by a written instrument executed by each of
them;
ii) By the Contractor upon not less than thirty (30) days advance notice to the Customer
(which notice shall state in reasonable detail the circumstances giving rise to the
exercise by the Contractor of its right of termination) in the event of a material breach
by the Customer of this Agreement which is not cured prior to the end of such period;
provided that the Contractor shall be required to only give ten (10) days advance
notice in the case of any failure of the Customer to make any payment to the
Contractor as required under this Agreement;
iii) By the Customer upon not less than thirty 30) days advance notice to the Contractor
(which notice shall state in reasonable detail the circumstances giving rise to the
exercise by the Customer of its right of termination) in the event of a material breach
by the Contractor of this Agreement which is not cured prior to the end of such
period; provided that the period shall be extended beyond the thirty (30) days if the
claimed breach is not reasonably capable of being cured within such thirty (30) day
period as long as the Contractor shall continue to use good faith and reasonable
efforts to cure the claimed breach;
iv) By a Party without notice or further action of any kind in the event of a Bankruptcy
Event with respect to the other Party;
v) By a Party by notice to the other Party in the event any Law, or any order,judgment
or decree of any Governmental Entity of competent jurisdiction, shall be enacted,
issued or enforced, or made applicable hereto, which makes any material part of this
Agreement or the arrangements contemplated herein unlawful; or
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vi) Termination or expiration of this Agreement in accordance with its terms shall not
affect or impair(a) any rights, obligations or liabilities existing or arising under this
Agreement prior to such termination or expiration, (b) any rights, obligations or
liabilities under this Agreement that are expressly to survive the termination or
expiration of this Agreement, or (c) any rights, obligations or liabilities accruing or
arising under any other agreement between any one or more of the Parties or their
Affiliates.
b) Notwithstanding anything to the contrary contained in this Agreement, the Contractor
shall have the right to suspend performance of any of its obligations under this
Agreement in the event and during any period that the Customer has not paid the
Contractor any amount due under this Agreement.
11)DISCLAIMER AND LIMITATION OF LIABILITY
a) The Customer agrees that the Contractor will not be liable to the Customer, and the
Customer will not make any claim against the Contractor or any of its Affiliates,
employees, or agents, except only for Contractors gross negligence in rendering the
Services or its willful and continuous failure to render the Services.
b) THE CUSTOMER ACKNOWLEDGES AND AGREES THAT EXCEPT AS
PROVIDED IN THE AGREEMENT, THE CONTRACTOR MAKES NO
REPRESENTATIONS, WARRANTIES, GUARANTEEES OR CONDITIONS,
EXPRESS, IMPLIED OR STATUTORY,WITH RESPECT TO THE
PERFORMANCE,VALUE, UTILITY, SAFETY, COMPLIANCE WITH LAWS,
OR OTHERWISE WITH RESPECT TO THE EQUIPMENT OR THE PARTS,
TOOLING AND CONSUMABLES TO BE PROVIDED, OR THE SERVICES TO
BE PERFORMED HEREUNDER, THE RESULTS OBTAINED THEREBY, NOR
IS IT MAKING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE,ALL OF WHICH ARE HEREBY
EXPRESSLY DISCLAIMED. THE MANUFACTURERS WARRANTY, IF ANY
WITH RESPECT TO THE EQUIPMENT, PARTS, TOOLING AND
CONSUMABLES SHALL BE THE ONLY WARRANTY APPLICABLE
THERETO.
c) Without limiting the generality of the foregoing, neither Party shall be liable for special,
incidental, consequential, punitive or exemplary damages or for loss of profits, loss of
time, inconvenience, loss of use of the Equipment or similar damages.
d) Notwithstanding anything to the contrary contained herein or otherwise, in no event shall
the Contractor be liable to the Customer for any amount in excess of the remuneration
actually paid by the Customer to the Contractor under this Agreement.
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12)INDEMNIFICATION
a) To the fullest extent permitted by law, the Contractor shall defend, indemnify and hold
harmless Customer and its Affiliates, and their officers agents, directors or employees
(collectively referred to as the "Indemnities"), and each of them, against and from any
and all allegations, losses, claims, liabilities, damages, fines and penalties or costs of
whatsoever nature (including reasonable attorneys' fees), attributable to bodily injury,
sickness, disease or death, including, without limitation any claims resulting from any
injury or death of any employee or Contractor or its subcontractors, or to injury to or
destruction of tangible property arising out of or resulting solely from negligent acts or
omissions of Contractor or its subcontractors; or solely arising out of, resulting from or
relating to: (A)the presence, discharge or release of petroleum, oil, or hazardous or toxic
wastes, substances or materials, as those terms are defined in applicable federal, state and
local environmental statutes, regulations and guidance documents arising out of, resulting
from or relating to the Equipment sold, or Services provided, under this Agreement and
attributable to any negligent or improper act or omission of Contractor or its
subcontractors, or: (B) any negligent or improper act or failure to act by Contractor or its
subcontractors pursuant to the terms and conditions of this Agreement. In the event that
any claim is made or any action or proceeding is brought against the Indemnitees, or any
of them, such Indemnity may, by notice to Contractor, require Contractor, at Contractor's
expense, to resist such claim or take over the defense of any such action or proceeding
and employ counsel for such purpose, such counsel to be subject to the prior approval of
such Indemnity, which approval shall be deemed to have been given hereby in the case of
counsel acting for the insurance underwriters of Contractor engaged in such resistance or
defense.
b) To the fullest extent permitted by law, the Customer shall defend, indemnify and hold
harmless, Contractor and any parent, subsidiary, successor, assign, contractor, sub-
contractor or affiliated entity of Contractor (however organized), and their officers,
directors, employees, agents, representatives and equity holders from and against any and
all allegations, losses, claims, liabilities, damages, fines and penalties or costs of
whatsoever nature (including reasonable attorneys' fees), and whether by reason of death
or injury to any person, or loss of or damage to any tangible property or otherwise
resulting solely from the negligent acts or omissions of Customer; or solely arising out
of, resulting from or relating to: (A) the presence, discharge or release of petroleum, oil,
or hazardous or toxic wastes, substances or materials, as those terms are defined in
applicable federal, state and local environmental statutes, regulations and guidance
documents arising out of, resulting from or relating to the Equipment sold, or Services
provided, under this Agreement and not attributable to any negligent or improper act or
omission of Contractor or its subcontractors, or: (B) any negligent or improper act or
failure to act by Customer pursuant to the terms and conditions of this Agreement. In the
event that any claim is made or any action or proceeding is brought against the
Contractor for which it intends to seek indemnification hereunder, Contractor shall
promptly notify Customer, and Customer may by notice to Contractor, at Customer's
expense, resist such claim or take over the defense of any such action or proceeding and
employ counsel for such purpose, such counsel to be subject to the prior reasonable
approval of Contractor, which approval shall be deemed to have been given hereby in the
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case of counsel acting for the insurance underwriters of Customer engaged in such
resistance or defense.
13)FORCE MAJEURE EVENTS
Each Party shall be excused from its obligations under this Agreement and shall have no
liability for any resulting damage in the event and to the extent that its performance (other
than a payment obligation) is delayed or prevented by any circumstance reasonably beyond
its control, including, without limitation, any fire, flood, epidemic, shortage of transportation,
shortage of raw materials or delay in the delivery thereof, explosion, act of any
Governmental Entity, any existing or future Laws, any legal interferences or restrictions, act
of God or of the public enemy, strike, walkout, other labor dispute, riot or other civil
disturbance, or act of terrorism (any such circumstance being referred to herein as a"Force
Majure Event").
14)ADDITIONAL TERMS
a) All notices, requests, waivers, consents and other communications under the Agreement
directed to either Party shall be in writing and shall be deemed to have been duly given
only if delivered personally or by facsimile transmission or mailed (first class postage
prepaid or certified, return receipt requested) to such Party at the following addresses of
facsimile numbers or to such other address or facsimile number as either Party shall have
last designated by notice to the other:
If to the Customer:
Address:
Fax Number:
If to the Contractor: Al Clark, President
Address: 8330 State Road
Philadelphia PA 19136
Fax Number: 215-335-2163
All such communications shall, if delivered personally as provided in this Section 14 or
by mail in the manner and to the address provided in this Section 14 be deemed given
upon receipt.
b) The Annexes are incorporated herein by reference. This Agreement and the Annexes
constitute the final, complete and entire agreement between the parties hereto pertaining
to the subject matter hereof and supersedes all prior and contemporaneous agreements,
understandings, negotiations and discussions, whether oral or written, or the Parties, and
there are no warranties, representation or other agreements between or among the Parties
i8
13
in connection with the subject matter hereof except as specifically set forth herein.
c) This Agreement may be amended only by an instrument in writing duly executed and
delivered by or on behalf of each Party hereto. This Agreement shall be construed and
enforced in accordance with and governed by the internal laws of Pennsylvania
applicable to contracts made and to be performed entirely within such State, without
regard to conflicts of law principles.
d) Any waiver of any breach of or failure to comply with any provisions of this Agreement
shall be in writing and approved an executed by the Party which is not in breach of or
non-compliance with this Agreement. Any such waiver shall not be interpreted as or
constitute a continuing waiver of the relevant provision or a waiver of any other breach
of, or failure to comply with, any other provision of this Agreement.
e) This Agreement may be executed in any number of counterparts, each of which shall be
an original and all of which shall constitute one and the same instrument.
f) In the event that any provision of this Agreement is declared to be void or unenforceable,
the remainder of this Agreement shall not be affected thereby and shall remain in full
force and effect to the extent feasible in the absence of the void and unenforceable
provision. The Parties furthermore agree to execute and deliver such amendatory
contractual provisions to accomplish lawfully as nearly as possible the goals and
purposes of the provision so held to be void or unenforceable.
15)Except as contemplated in Sections 11 and 12 this Agreement is intended to be for the sole
benefit of the Parties, and it is not the intention of the Parties to confer third party beneficiary
rights or remedies upon any other Person.
16)The provisions of sections 5, 10, 11, 12 and 14 shall survive termination or expiration of this
Agreement.
17)The relationship between the Contractor and the Customer under this Agreement is that of
independent contractors and not of employer-employee or principal-agent. The Contractor is
not the legal representative of the Customer under this Agreement, nor is the Customer the
legal representative of the Contractor under this Agreement. Neither the Contractor nor the
Customer has the right or authority to assume or undertake any obligation or make any
representation on behalf of the other.
19
14
18)IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and
delivered as to the date and year first above written.
THE CUSTOMER
By:
Its:
THE CONTRACTOR
By:
Its:
20
15
ANNEX I
Certain Definitions
A. The following terms used in the Agreement have the following respective meanings
unless the context clearly requires otherwise.
"Affiliate" means, in the case of a particular Person, any other Person that directly or
indirectly through one or more intermediaries, controls or is controlled by, or is under
common control with, such Person. For purposes of this definition, "control" of a Person
and words of correlative meaning means the power, direct or indirect, to direct or cause
the direction of the management and policies of such Person, whether by contract or
otherwise.
`Bankruptcy Event"means, with respect to a Person, (a) the adjudication of such Person
as bankrupt or insolvent or the filing by such Person of a petition or application to any
tribunal for the appointment of a trustee or receiver of such Person or any substantial part
of the assets of such Person, or (b) the commencement of any voluntary or involuntary
bankruptcy proceedings, reorganization proceedings or similar proceeding with respect to
such Person or the entry of an order appointment a trustee or receiver or approving a
petition in any such proceeding or(c) the making by such Person of an assignment for the
benefit of creditors of all or substantially all of its assets or the admission by such Person
in writing of inability to pay its debts as they become due.
"Base Rate" has the meaning set forth in Section 5.
"Equipment" means the list of covered equipment as detailed in Annex II.
"Effective Date" means the date the Agreement has been signed by both Parties.
"Facility'means the premises at which the Equipment is installed.
"Force MaJ'ure Event"has the meaning set forth in Section 13.
"Governmental Entity" means any United States, state, local or foreign court or
government, governmental authority, governmental commission, governmental agency or
political subdivision whatsoever.
"Hazardous Materials" means toxic substances, hazardous substances, or hazardous
wastes as such terms are defined in any law, statute, ordinance, or regulations
promulgated by any national, federal, state or local government authority.
"Laws" means and includes any and all laws, statues, treaties, rules, regulations,
ordinance, principles of common law, and other pronouncements having the effect of law
in the United States of American or any state, county, city or other political subdivision
or of any governmental or regulatory authority or any foreign jurisdiction or
multinational organization.
21
16
"Maintenance Schedule" means the Maintenance Schedule attached as Annex III as the
same may be amended from time to time as provided herein.
"Person" means any individual, corporation, partnership, Limited Liability Company,
trust, business organization, Governmental Entity or other entity whatsoever.
"Services" shall mean only those Services described in Annex III.
"Taxes" means all United States state local, foreign, and other gross income, gross
receipts, profits, goods and services, social security, sales, use ad valorem, single
business, transfer, franchise, profits, license, lease, service, service use, withholding,
payroll, employment, excise, business license, occupation, real property gains, severance,
stamp, occupation, premium, property, windfall profits, customs, duties, or other taxes,
fees, assessments, environmental, alternative minimum, windfall and capital taxes, and
all other obligations of the same or a similar nature to any of the foregoing, together with
any interest and nay penalties, additions to tax, or additional amounts with respect
thereto.
"Tenn"has the meaning set forth in Section 2.
"Technical Instructions" means the Technical Instructions attached hereto as Annex IV.
These may be amended from time to time as provided herein.
B. Unless the context of this Agreement requires otherwise, (i) words of any gender include
each other gender; (ii) words using the singular or plural number also include the plural
or singular number, respectively, (iii) the terms "herein", "hereby" and derivative or
similar words refer to this entire Agreement; (iv) the term "Section" or"Annex"refers to
the specified Section or Annex of this Agreement. This Agreement is being entered into
by and among competent and sophisticated parties who are experienced in business
matters. Therefore, any ambiguous language in this Agreement will not necessarily be
construed against any particular party as the drafter of the language.
^ 2
17
ANNEX II
List of Covered Equipment
1. XX (XX) GE Jenbacher XXXXX containerized engine-generator sets
2. XX (XX) GE Jenbacher Di.ANE XT control panel
23
is
ANNEX III
Description of Maintenance Services and Maintenance Schedule
Western Energy Systems®will provide Gold Services as specifically described in Annex III
enclosures.
24
19
ANNEX IV
Technical Instructions
The GE Jenbacher O&M manuals for the specific project provide Equipment specific Technical
Instructions, maintenance, and product information. The following Technical Instructions may
be additional to those provided in the GE Jenbacher O&M manuals for the specific project. The
following Technical Instructions are incorporated herein by reference only. Copies will be made
available upon written request.
1. 19003 0 Daily Inspection
2, TI 1000-0099A Approval Procedures for Lube Oils
3. TI 1000-0099B Limit Values for Waste Oil
4. TI 1000-0099C Procedure for Determination of Plant Specific Oil Life
5. TI 1000-0099D Initial pH Values of Used Lubricating Oils
6. TI 1000-0099K Analysis of Used Lubricating Oils
7. TI 1000-0112 Sampling Lubricating Oil
8. TI 1000-0200 Composition of cooling water in closed primary circuits
9. TI 1000-0201 Antifreezing compound
10. TI 1000-0204 Anti-Corrosive Additive for Cooling Water
11. TI 1000-0300 Fuel Gas Quality
12. TI 1000-1109 Lubricating oil for type 2, 3, 4 and 6 GE Jenbacher engines.
13. TI 1100-0110 Boundary Conditions for GE Jenbacher gas engines
14. TI 1100-0111 General Conditions Operating and Maintenance
15. TI 1400-0091 Lack of Condensate-Fuel Gas
16. TI 2300-0005 Safety Instructions
n5
4.
20
ANNEX V
WES Certificate of Insurance
26
21
ANNEX VI
WES Schedule of Charges for Non-Agreement Maintenance, Repair and Testing Services
27
22
THIS PAGE LEFT INTENTIONALLY BLANK
Z8
23
ENERGY 51r57w,E,MS
Power Systems Specialists
Gaseous Fueled Power Generation Systems
Co-Generation • landfill a Biogas
SILVER Program for Natural Gas or clean Biogas
SILVER programs provide scheduled, defined GEJ maintenance, services, and component replacement by WES
factory trained and qualified technicians. Inspections and service are subject to OPH and not driven by kWh or load
factor. Customer personnel perform routine daily, weekly, monthly inspections and services highlighted in yellow
on the GEJ Maintenance Schedule.
Customer personnel perform the following:
• Routine daily, weekly, monthly inspections and services as called for in GEJ "Maintenance Schedules" for
the specific project. Typical inspections and services include:
o Daily visual inspection for coolant, exhaust, and fuel gas leaks; inspection of vibration dampers; inspect
fuel gas piping and drain condensate; inspect heat exchangers and coolant piping, drain condensate as
required; check and maintain strainers and filters.
o Daily entries and updating of Operating Logbook documents.
o Daily checks of manometer readings at air intake filter housing.
o Cleaning of air intake housing and replacement of air filter(s) as required between scheduled maintenance
intervals by Customer.
o Daily checks of engine oil pressure and replacement of oil filter if required between scheduled
maintenance intervals by Customer.
o Weekly ignition voltage inspections and recording of measurements, inspection and re-gapping of spark
plug electrodes as required to accomplish GEJ projected intervals.
(WES allows for and provides spark plugs based on GEJ projected useful life for natural gas and clean biogas applications.
Estimated useful life of spark plugs on natural gas or clean biogas varies by Type engine however is subject to fuel gas quality,
engine operation,and spark plug maintenance.Additional quantities of spark plugs beyond GEJ projected useful life will result in
additional charges)
o Monitor and draw tube oil and coolant samples on a scheduled basis.
o Monitor and draw fuel gas samples for testing by WES or fuel system testing as may be required to
determine compliance with GEJ requirements per TI 1000-0300.
o Monitor and add coolant,coolant inhibitor,and tube oil as required.
o Customer personnel will provide and add make up tube oil, provide tube oil for oil changes by WES
during planned maintenance intervals, and will dispose of used oil at GEJ defined maintenance intervals
however subject to tube oil analysis and tube oil condition.
o Inspect, clean, and maintain engine starting batteries,cables,and terminals.
o Inspect coolant levels, pressures, and draw coolant samples annually.
o Grease generator bearings per generator manufacturer's requirements
A Division of Penn Power Group
Alaska Office: 700 W 59' Avenue,Suite G,Anchorage,AK 99518(T)907.569.1090(F)907,569.1091
Bay Area Office:23785 Cabot Blvd.Suite 304,Hayward,CA 94545(T)510,265.0581 (F)510.265.0581
Orange County Office:499 Nibus Street,Unit B,Brea,CA 92821 (T)714.529.9700(F)714.529.9701 rig
Corporate Office:8330 Stale Road, Philadelphia,PA 19136-2986(T)215.335.5010(F)216.335.2163 4'9
www.weesys.com
WES factory trained and qualified technicians provide the following services:
• Perform planned maintenance, inspections, component replacement, minor, and major overhauls at GEJ
recommended 2000 OPH service intervals for each Jenbacher engine-generator set.
• Review Owner daily entries and updating of Operating Logbook documents
• Provide lube oil sample kits for use by Owner to draw oil samples per GEJ recommendations.
• Review lube oil samples for Owner and provide comment as required.
• Conduct coolant testing on an annual basis and provide reports to Owner.
• Inspect Di.ANE controls, program settings; download operating systems for trend analysis and review of
system performance.
WES factory trained and qualified technicians will perform the following inspections and services at GEJ
recommended 2000 OPH intervals. Inspections and services vary depending upon total OPH on the units.
Inspections and services are subject to OPH and not driven by K Wh or load factor.
• 2000-4000-6000-8000-12,000-14,000-16,000-18,000-22,000-24,000-26,000-28,000-32,000-34,000-36,000-
38,000-42,000-44,000- 46,000- 48,000- 52,000- 54,000- 56,000- 58,000-62,000- 64,000- 66,000-68,000-
72,000-74,000-76,000-78,000 &82,000 OPH intervals:
o Review Owner daily entries and updating of Operating Logbook documents
o Inspect MANE controls, program settings; download operating systems for trend analysis and review of
system performance.
o Inspect, adjust and record data for:
• Intake and exhaust valve to valve lifter clearances
• Intake and exhaust valve lash adjustments
• Intake and exhaust valve stem projection(recession)
o Inspect rocker arms, valve lifters, adjusting screws,tappets,and lock nuts
o Inspect valve cover gaskets and replace as required.
o Inspect, maintain,and make adjustments to ignition systems inclusive of:
• Inspect and tighten connections and terminals at ignition box.
• Inspect ignition harness.
• Inspect ignition pickups for debris, clean as required, inspect mounting distance.
• Inspect ignition coils and record ignition voltages.
• Inspect ignition plug sockets and springs.
• Inspection, re-gapping, and changing of spark plugs.
o Inspect and clean crankcase ventilation system,replace filter cartridge and media
o Inspect,clean, adjust, and lubricate regulator rod linkage as required.
o Inspect,clean, and adjust throttle valve.
o Inspect,clean, lubricate, and adjust throttle valve: actuator control rod assemblies.
o Subject to OPTION, WES field technicians perform lube oil and filter changes at defined GEJ
maintenance intervals however subject to lube oil analysis and lube oil condition. Increased frequency of
lube oil changes result in additional charges. WES may, subject to Owner decision, provide all lube oil
including make up oil for Owner personnel routine maintenance.
o Inspect plate and frame heat exchangers, measure and record differential pressures, disassemble, clean,
and reassemble heat exchangers as required.
o Inspect gas train filter and clean filter housing.
o Inspection of the electrical generator assembly, interior compartments, assembly, generator bearings, and
generator coupling inclusive of:
• Inspect and lubricate generator bearings per manufacturer's requirements.
• Inspect and clean generator compartment, cooling air intake and outlets.
• Inspect auxiliary wiring for chafing and terminations.
• Inspect and check surge suppressor, varister and rectifier diodes per manufacturer's
recommendations.
30
WES factory trained and qualified technicians will perform the following inspections and services at 10,000-
50,000&70,000 OPH intervals. This will include the following:
o Review Owner daily entries and updating of Operating Logbook documents
o Inspect Di.ANE controls, program settings; download operating systems for trend analysis and review of
system performance.
o Inspect,adjust and record data for:
• Intake and exhaust valve to valve lifter clearances
• Intake and exhaust valve lash adjustments
• Intake and exhaust valve stem projection(recession)
o Inspect rocker arms,valve lifters,adjusting screws,tappets, and lock nuts
o Inspect valve cover gaskets and replace as required.
o Inspect, maintain, and make adjustments to ignition systems inclusive of:
• Inspect and tighten connections and terminals at ignition box.
• Inspect ignition harness.
• Inspect ignition pickups for debris, clean as required, inspect mounting distance.
• Inspect ignition coils and record ignition voltages.
• Inspect ignition plug sockets and springs.
• Inspection,re-gapping,and changing of spark plugs.
o Inspect and clean crankcase ventilation system, replace filter cartridge and media
o Inspect, clean, adjust,and lubricate regulator rod linkage as required.
o Inspect, clean,and adjust throttle valve. Inspect and install new bearings as required.
o Inspect,clean, lubricate, and adjust throttle valve: actuator control rod assemblies.
o Provided the lube oil option is selected WES field technicians will perform lube oil and filter changes at
defined GEJ maintenance intervals. WES may, subject to Owner decision, provide all lube oil including
make up oil for Owner personnel routine maintenance.
o Inspect plate and frame heat exchangers, measure and record differential pressures.
o Inspect gas train filter,clean filter housing, and install new gas train filter element.
o Inspection of the electrical generator assembly, interior compartments, assembly, generator bearings, and
generator coupling inclusive of.
• Inspect and lubricate generator bearings per manufacturer's requirements.
• Inspect and clean generator compartment,cooling air intake and outlets.
• Inspect auxiliary wiring for chafing and terminations.
• Inspect and check surge suppressor, varister and rectifier diodes per manufacturer's
recommendations.
o Inspect turbocharger, intake compressor housing and wheel assembly, exhaust housing and wheel
assembly,check and record end play to determine turbocharger condition.
o Inspect engine cooling pump and check for wear and leaks.
o Inspect electric starter motor for proper operation.
o Inspect gas mixer assembly.
o Inspect exhaust manifold assembly, inclusive of insulation, flexible compensators, and mounting
hardware.
31
WES factory trained and qualified technicians will perform the following inspections and services at 20,000-
40,000&80,000 OPH intervals. This will include the following:
o Review Owner daily entries and updating of Operating Logbook documents
o Inspect DLANE controls, program settings; download operating systems for trend analysis and review of
system performance.
o Inspect,adjust and record data for:
• Intake and exhaust valve to valve lifter clearances
• Intake and exhaust valve lash adjustments
• Intake and exhaust valve stem projection(recession)
o Inspect rocker arms, valve lifters, adjusting screws, tappets,and lock nuts
o Inspect valve cover gaskets and replace as required.
o Inspect,maintain, and make adjustments to ignition systems inclusive of:
• Inspect and tighten connections and terminals at ignition box.
• Inspect ignition harness.
• Inspect ignition pickups for debris,clean as required, inspect mounting distance.
• Inspect ignition coils and record ignition voltages.
• Inspect ignition plug sockets and springs.
• Inspection, re-gapping,and changing of spark plugs.
o Inspect and clean crankcase ventilation system,replace filter cartridge and media
o Inspect,clean, adjust, and lubricate regulator rod linkage as required.
o Inspect,clean, and adjust throttle valve. Inspect and install new bearings as required.
o Inspect,clean, lubricate, and adjust throttle valve: actuator control rod assemblies.
o Provided the lube oil option is selected WES field technicians will perform tube oil and filter changes at
defined GEJ maintenance intervals. WES may, subject to Owner decision, provide all lube oil including
make up oil for Owner personnel routine maintenance.
o Inspect plate and frame heat exchangers, measure and record differential pressures.
o Inspect gas train filter,clean filter housing, and install new gas train filter element.
o Inspection of the electrical generator assembly, interior compartments, assembly, generator bearings, and
generator coupling inclusive of.
• Install new generator coupling.
• Install new generator bearings per manufacturer's recommendations.
• Inspect and clean generator compartment, cooling air intake and outlets.
• Inspect auxiliary wiring for chafing and terminations.
• Inspect and check surge suppressor, varister and rectifier diodes per manufacturer's
recommendations.
o Remove and recondition turbocharger assembly.
o Install exchange engine cooling pump.
o Inspect electric starter motor for proper operation.
o Inspect gas mixer assembly.
o Inspect exhaust manifold assembly, inclusive of insulation, flexible compensators,and mounting
hardware.
32
WES factory trained and qualified technicians will perform a minor overhaul at GEJ recommended 30,000 OPH
interval, inclusive of the following inspections, services, and scheduled component replacements.
o Review Owner daily entries and updating of Operating Logbook documents
o Inspect Di.ANE controls, program settings; download operating systems for trend analysis and review of
system performance.
o Inspect,adjust and record data for:
• Intake and exhaust valve to valve lifter clearances
• Intake and exhaust valve lash adjustments
• Intake and exhaust valve stem projection(recession)
o Inspect rocker arms,valve lifters,adjusting screws, tappets,and lock nuts
o Inspect valve cover gaskets and replace as required.
o Inspect, maintain, and make adjustments to ignition systems inclusive of:
• Inspect and tighten connections and terminals at ignition box.
• Inspect ignition harness.
• Inspect ignition pickups for debris, clean as required,inspect mounting distance.
• Inspect ignition coils and record ignition voltages.
• Install new spark plug sockets and springs.
• Inspection, re-gapping, and changing of spark plugs.
o Inspect and clean crankcase ventilation system, replace filter cartridge and media
o Inspect, clean,adjust,and lubricate regulator rod linkage as required.
o Inspect, clean, and adjust throttle valve. Inspect and install new bearings as required.
o Inspect, clean, lubricate, and adjust throttle valve: actuator control rod assemblies.
o Provided the lube oil option is selected WES field technicians will perform lube oil and filter changes at
defined GEJ maintenance intervals. WES may, subject to Owner decision, provide all lube oil including
make up oil for Owner personnel routine maintenance.
o Inspect plate and frame heat exchangers, measure and record differential pressures.
o Inspect gas train filter,clean filter housing, and install new gas train filter element.
o Inspection of the electrical generator assembly, interior compartments, assembly, generator bearings, and
generator coupling inclusive of.
• Inspect and lubricate generator bearings per manufacturer's requirements.
• Inspect and clean generator compartment, cooling air intake and outlets.
• Inspect auxiliary wiring for chafing and terminations.
• Inspect and check surge suppressor, varister and rectifier diodes per manufacturer's
recommendations.
o Inspect turbocharger, intake compressor housing and wheel assembly, exhaust housing and wheel
assembly,check and record end play to determine turbocharger condition.
o Inspect engine cooling pump and check for wear and leaks
o Inspect electric starter motor for proper operation.
o Inspect gas mixer assembly.
o Inspect gas mixture bypass valve.
o Remove and install a new torsional vibration damper.
o Inspect GEJ Diane XT control cabinets and install new filters on fan-ventilator plates.
o Remove cylinder heads and install GEJ exchange cylinder heads. Cores will be inspected for reusability
and returned for core credit. Partial or full core charges apply if cylinder heads are found to be not in
acceptable condition.
o Inspect rocker arm mechanisms and valve train regulation, inspect and record valve recession.
o Remove cylinder kits and install new components inclusive of:
• Pistons, piston rings, and piston cooling devices
• Cylinder liners and scraper rings
• New connecting rod bearings.
• New connecting rods.
o Inspect camshafts and cam follower assemblies. Install new valve tappet adjusting screws and nuts.
Additional charges apply if camshafts and cam follower assemblies require replacement.
o Remove and inspect main bearings. Additional charges apply if bearing(s)need to be replaced.
33
GEJ 60,000 operating hour intervals provide for major overhauls on non-natural applications. WES performs major
overhauls utilizing GE Jenbacher re-manufactured, exchange long engine block assemblies in order to minimize
downtime. Depending upon the Type engine, GEJ Exchange engine blocks include the following services and
components:
• Cylinder block assembly has been inspected, crankshaft gallery bored and machined as required, cylinder
packing bores inspected, machined,and re-sealed as required.
• New, updated pistons, piston rings, cylinder liners m
• New connecting rods(updated to latest style)
ai
• New,updated main,rod,and thrust bearings
• New, updated camshafts
• New,updated camshaft bearings
• Reconditioned crankshaft
• New front and rear crankshaft seals incorporating latest technology Typical Type 3 Long Block
• New vibration dampers
• Reconditioned front and rear gear trains with GEJ exchange gear wheel assemblies, new gear train
bushings and bearings
• Reconditioned engine lube oil pump
• Updated lube oil filter assemblies
• GEJ exchange water pump
• GEJ exchange cylinder heads with new, updated valve seats, new intake and exhaust valves, new valve
springs,rotators,and keeper assemblies.
• Reconditioned rocker arm assemblies with new tappets and adjusting screws.
• Complete new, updated ignition system with ignition rail, external
ignition coils,wires,spark plug sockets,and ignition box.
f. .
Upgraded Ignition Boxes
IC 500-IC 920-IC 922
r"r f Replacements vary depending 34
on original ignition box.
Typical Updated Ignition Rail
• New spark plugs
• GEJ exchange electric motor starter !¢I III
• Reconditioned exhaust manifolds with new r
compensator segments, gaskets, seals, and
upgraded exhaust manifold insulation. (Long
block only, inspected on short block)
• Reconditioned intercooler
• Updated Exhaust Manifolds
• New thermocouples(Long block only,inspected on short block) • Updated Flexible Compensators
• Updated Manifold Insulation
• New turbocharger with external insulation i
r t
w
• Upgraded exchange turbocharger bypass
GEJ factory cleaned and pressure tested
• GEJ exchange intercooler console with new throttle valve intercoolers;upgrade turbo bypass valves
• Reconditioned throttle actuator assembly
• Reconditioned gas mixer assembly
Updated Exchange Type 3 Gas Mixer
Long blocks provided with updated gas version
with internal actuating mechanism and sensor.
35
WES Major Overhaul Field Services
• Removal of old engine and generator.
• Provide and reinstall GEJ exchange block assembly.
• Inspection of gas train and gas train safety devices. Install new gas regulator diaphragms.
• Removal of electric generator assembly for reconditioning:
o The generator is reconditioned by a factory qualified electric supplier and will include the
following:
• Disassembly, cleaning, inspection of stator,rotor, and windings
• Inspection of RTD's(if so equipped)
• Vacuum and pressure test,clean, degrease, and epoxy impregnation of windings
• New generator bearings
• Reassembly of generator assembly and bench power testing.
• Inspection and testing of voltage regulator and power factor cards
o Delivery and reinstallation of electric generator assembly to frame rails
• Provide and install new generator-engine coupling.
• Inspect plate and frame heat exchangers for repairs or resealing.
• Inspection of pre-chamber gas compressor. (Type 6)
• If required, provide pricing for reconditioned or exchange gearbox(Type 6,older Type 3)
• Supply and installation of new coupling assembly and rim.
• Supply and installation of new sylomer strips, new rubber mounts between engine, generator, and
engine-generator frame assembly.
• New air intake filter
• Cold and hot alignments of engine and generator assembly
• Inspection of CANBUS and Ethernet cables FROM Di.ANE panel to M 1 panel.
• Engine-generator set vibration testing and documentation
• Engine-generator set startup, performance testing, and startup documentation
• Updated parts and service manuals and CD's. (Long Block only)
NOTE: All items involving inspection, for all operating hour intervals, may result in additional charges for parts
and services required for reconditioning, replacement, or upgrading. These are provided as additional charge only
because some or all of these items may have been addressed prior to scheduled service intervals, inspections,minor
or major overhauls.
^ 6
J
Minimum Requirements for SILVER Programs
1. All WES LTSA offers are based strictly on WES Proposal Format, Programs, Form of Agreement,Terms
and Conditions.
2. Equipment must be installed with reasonable access and must be available for planned maintenance and
component replacement at WES request.
3. Equipment must be installed to GEJ Technical Instructions and installation requirements.
4. Fuel gas must comply with GEJ requirements per Tl 1000-0300.
5. Coolant and lube oil must comply with GEJ requirements. Lube oil and coolant samples must be provided
in accordance with manufacturer's requirements and forwarded to WES on a timely basis for review. Lobe
oil and coolant analysis reports must be part of Operating Logs and available for WES review.
6. Owner completed Operating Logs must provide daily operating details, maintenance tasks performed, and
for Corrective Repair coverage, each maintenance task is to be documented in WES provided Maintenance
Protocols,signed by the engineer and operator,and available to WES upon request.
7. Spark plug ignition voltages of individual spark plugs have to be recorded by means of a WES provided
Maintenance Protocol for ignition voltages and available to WES upon request.
8. Owner personnel must promptly notify WES of any operational issues or irregularities that may require
attention or repair.
3 !
Exclusions
The following exclusions apply unless specifically provided for in a WES proposal.
1. Maintenance, parts, labor, freight or services for any equipment not specifically included in our proposal.
2. Maintenance, parts, labor, freight, or services of any type not specifically performed or authorized by WES.
3. Increased quantities of spark plugs, filters, lube oil,coolant, or covered parts of any type required as a
result of owner or third party maintenance, fuel gas quality, or outside mechanical or electrical forces.
4. Any consequential or contingent damages,costs, penalties, fines.
5. Equipment damages or repairs of any type associated with:
a. Operator or other Owner personnel errors or negligence
b. Weather related damages
c. Short circuit or electrical failures
d. Failures or damages of any kind associated with improper installation or operation
e. Coolant or lube oil failures
f. Owner control system induced failures
g. Engine overspeeds or failures due to any type of centrifugal force
h. Force Majure
6. Operation of the Equipment by the Owner personnel or Owner sub-contractor not in compliance with the
Equipment manufacturer's standard operating parameters
7. Rigging and removal of equipment for major repairs
8. Assembly or disassembly of walls, building components,structures, roofs, equipment,or any other
constraint(s)to gain access to equipment for performance of planned maintenance,component replacement,
or corrective repairs.
9. Availability or Performance Guarantees are specifically excluded unless discussed and understood in
advance of a WES commercial offer.
118
J
AWMAW
�TM
E/VRMJU V AS Y5' TEMAS
Power Systerns Specialists
01 December 2014
Mr.Patrick Sweeny
Director of Maintenance and Facilities
City of Palm Springs
425 N.Civic Drive
Palm Springs,CA 92262
RE: Long Tenn Service Agreement
Dear Patrick:
We are pleased to submit a Long Term Service Agreement (LTSA) proposal for your consideration. This proposal includes a
number of different LTSA programs from which you may choose. Individual LTSA program details are provided in Appendix A,
Long Term Service Agreement Options, a copy of which is enclosed herein. The following assumptions are factored into these
offers:
1.Project Name: Municipal Plant COGEN
Address:
City,State,Zip Code Palm Springs,CA.
2.Type Equipment: 1 JGS 416 1117 kW, 480 Volts, 1.0 P.F.,3 Phase, GEJ V#C86, Natural Gas
3. Equipment OPH: 0 at time of proposal
Comments:
4.Term of Agreement: 10 Years, 8320 OPH/year,83,000 OPH total
5.Minimum OPH Provision: The contract price is based on expected minimum operating hours (OH)to be reached per year.
The defined yearly minimum OH for this agreement is 6656 OH(80%of expected annual OPH).
We will invoice the minimum annual OPH.
6.Validity of Proposal: The proposal is valid for sixty(60)days from the date of this proposal.
7.Freight and Duty: Ocean and domestic inland freight charges are included.
8.Taxes,Permits and Fees: U.S Customs Duty is included however no allowances are made for local,state,or Federal taxes,
permits,and fees.
A Division of Penn Power Group
Alaska Office: 700 W 59"Avenue,Suite G,Anchorage,AK 99518(T)907.569.1090(F)907.569.1091
Bay Area Office:23785 Cabot Blvd. Suite 304,Hayward,CA 94545(T)510.265.0581 (F)510.265.0581
ucZ'p��� Orange County Office:499 Nibus Street, Unit B,Brea,CA 92821 (T)714.529.9700(F)714.529.9701
J
J
Corporate Office:8330 State Road,Philadelphia, PA 19136-2986(T)215.335.5010(F)215.335.2163
www.weesys.com
Page 2 of 4
9.Type of Agreement: $/OPH $/kWhe Total Cost
A NES-WES Silver Program w/o Lobe Oil $19.58 $.0173 $1,625,353
B NES-WES Basic Program w/o Labe Oil 40,001 —83,000 OPH $17.33 $.0153 $745,190
Basic Plan Pricing effective at 40,001 OPH if City chooses to switch to Basic Plan after 40,000 OPH. Total blended base cost
of Silver and Basic Plans over 83,000 OPH if switch to Basic is made: $1,528,528
C Major Overhaul at 60,000 OPH Lump Sum at time of Service $458,200
10.Scope of Agreement:
Each program, combined with Balance of Plant Coverage, includes Field and Shop Labor, Parts and Materials for the
engine generator set and the following:
I— GEJ Container Package Radiators r Cooling System Electric Motors
I— Engine Cooling/Radiator Pumps Heat Recovery Equipment r SCR/Oxicats
I` Generator Circuit Breaker i Generator Set Motor Control Center r Pre-Chamber Compressor
F Gas Blower ` Gas Cleaning System I— Engine Batteries
W Remote Monitoring F Vibration Analysis vo Annual Alignment
F% Emissions Testing Iv Oil Changes F- Coolant Changes
9 Major Engine Overhaul r Minor Engine Overhaul 9 Generator Reconditioning
Other Equipment:This LTSA proposal covers the GEJ JGS 416 engine-generator set and associated SCR/Oxicat only.
Comments: .
11.Engine Lubricating Oil:
I— Included I4 NOT Included
Comments:
Engine lubricating oil is changed subject to GEJ scheduled intervals. Oil samples are required per GEJ scheduled intervals,
no less than monthly. Oil analysis may advise increased frequency of oil change subject to fuel gas quality,wear elements,
or coolant contamination.Increased demand for lube oil will result in additional charges as required.
Oil samples should be drawn on a regular basis, no less than quarterly. Oil analysis may advise increased frequency of oil
change.Increased demand for tube oil will result in additional charges as required.
Any proposed lube oil and filter changes are included only during scheduled maintenance intervals. Routine oil level
inspections and addition of make-up oil are performed by Owner personnel unless we provide operating services.
Additional oil and filter changes required beyond scheduled maintenance intervals, for any reason, will be additional
charges as required.
12.Engine Lubricating Oil Samples:
Vo Included I` NOT Included
Comments:Engine lube oil sample kits are provided for Owner's use.
40
Page 3 of 4
13. Used Oil Disposal:
F Included 1v NOT Included
Comments:
14.Coolant:
Included iv NOT Included
Comments:
15.Coolant Samples:
i�o Included T NOT Included
Comments: WES Technicians will draw Coolant Samples annualy
16.Fuel Gas Samples:
Included Fv NOT Included
Comments:
17.General Comments:
18. Annual Increases: The proposal will increase on an annual basis on the basis of an agreed upon CPI, not to exceed
5 %annually for the initial three(3)year period.
41
Page 4 of 4
This proposal is subject strictly to Western Energy Systems Agreement for Maintenance of Equipment.
We appreciate the opportunity to submit this proposal and look forward to working with you on this project. Upon your acceptance
of this Proposal,we will forward a project specific Maintenance Agreement for your approval and signature. Please contact us with
any of your questions.
Best Regards,
Richard Whittemore
VP-Product Support
Western Energy Systems
CC: Al Clark,Western Energy Systems
Steve Hall, Western Energy Systems
Customer Acceptance of Proposal:
Type Agreement Selected:
Name:
Signature:
Date:
Enclosures: Appendix A-NES-WES Long Term Service Agreement Options
Appendix B-WES Agreement For Maintenance of Equipment
42
Alk
ENERGrY 5 VAS TEM5
Power Systems Specialists
Gaseous Fueled Power Generation Systems
Co-Generation . Landfill . Biogas
LTSA Annual Price Escalator Procedure
Price adjustments shall be calculated by the end of January, for the prior year, using the defined B.L.S.
indices. All price adjustments shall be effective January 1.
In the event the specified indices are discontinued by the B.L.S.,the Parties shall negotiate and agree
upon reasonably equivalent indices for annual price adjustments.
The adjusted price shall be determined as follows:
Po = Base rate at close of current calendar year.
P =New price following adjustment effective January 1 of each year calculated as follows:
55% M = Material, U.S. B.L.S., U.S. Import Price Indexes, Germany-Manufactured Articles (Series
ID EIUCOGERTOT) where; MI = new January 1 period and Mo= previous January I period.
45% L = Labor, U.S. B.L.S. C.P.I., Western Urban-All Urban Consumers (Series ID
CUUR0400SA0) where; L1 = new January 1 period and Lo= previous January 1 period.
All adjustments shall be made on a blended calculation, using the stated percentages and references
as follows; P= Po * (45% L/LO+ 55% Mt/Mo).
LTSA Annual Price Escalator History
2005 - 2006 1.5%
2006 - 2007 2.6%
2007 - 2008 2.4%
2008 - 2009 3.6%
2009 - 2010 0.0%
2010 - 2011 1.9%
2011 - 2012 2.6%
2012 - 2013 0.6%
2013 - 2014 1.5%
A Division of Penn Power Group
i
Main Office:499 Nibus Street,Unit B,Brea,CA 92821 (T)714.529.9700(F)714.529.9701 43
Corporate Office:8330 State Road, Philadelphia,PA 19136-2986(T)215.335.5010(F)215.335.2163
www.weesys.com