ADVANCED WATER TREATMENT & DESALINATION GREENFIELD + WATER = BLUEFIELD

Source: Joshua Doubeck

FOCUS  REPORT  

US  Municipal  Wastewater  &  Reuse:  Market  Trends,  Opportuni2es,  &  Forecasts,  2015-­‐2025      Table  of  Contents    June  2015  

Purple/ Flickr / cropped & resized/ / Source: John Loo / CC BY-SA 2.0

ADVANCED WATER TREATMENT & DESALINATION

US Municipal Wastewater & Reuse: Market Trends, Opportunities, & Forecasts, 2015-2025 FOCUS REPORT

About This Focus Report

2

US Municipal Wastewater & Reuse: Market Trends, Opportunities, & Forecasts, 2015-2025 is an in-depth analysis of the rapidly changing U.S. municipal water landscape for wastewater reuse solutions and business strategies. This 141-page Focus Report has been developed to support companies addressing the US market with detailed data, market trend analysis, and growth forecasts. Bluefield forecasts market outlook for reuse to 2025. Bluefield’s in-depth forecasts build on the more than 8.3 million m3/d of municipal wastewater flows currently reused in the US. Wastewater reuse for municipal utilities will increase 61% by 2025, requiring US$11.0 of capital expenditures. Key forecast outputs include state-by-state capacity additions, technology utilization, capital investment, and reclaimed water applications. A detailed research methodology and approach is provided in the report with forecast data and analysis. Uncovering greenfield opportunities in a scaling US project pipeline. From California to Florida, municipal utilities and industrial off-takers are responding to a more regulated and volatile water market environment. Bluefield’s bottom-up data analysis of more than 3,000 existing wastewater treatment plants, over 700 operating wastewater reuse systems, and 247 reuse projects in various stages of planning signal an increasingly positive climate benefitting water solutions providers. The lion’s share of the activity, or 94%, is expected to take place in nine states, headlined by Florida and California. Identifying drivers of change. Bluefield highlights the evolving water landscape by state and water district that are shaping business models and market growth going forward. Deep-dive analysis of regulatory policies and investment across 9 primary states and 32 water districts are included in 41 profiles to support companies as they navigate a nascent and highly fragmented landscape. Bluefield’s analysis also indicates a change in the market’s overall profile. Potable reuse – treating wastewater to drinking water quality – currently makes up 15% of the total capacity, but is expected to increase to 19% of total water reuse by 2025.

California)Municipal)Wastewater)Treatment)&)Reuse:)Market'Drivers,'Trends,'and'Outlook'

ADVANCED WATER TREATMENT & DESALINATION

DATA INSIGHT

21

SoCal Represents Market Epicenter

California’s 2.3 million m3/d project pipeline is dominated by Los Angeles County, where urban water

use, population growth, and drought combine for the greatest demand.

San Diego .378

Riverside .227

San Bernardino .174

Stanislaus .075

Santa Clara .113

Fresno .037 San Francisco

.022

Orange .022

Sacramento .018

Monterrey 15.1

Yolo .011

Contra Costa .0113

Marin <.01

Merced <.01

Napa <.01

Ventura <.01

Los Angeles 1.222

Geographically, more than 94% of California’s project

pipeline is located in seven counties

•  Seven counties, led by Los Angeles, have more than

37,000 m3/d in planned capacity additions. Another 11

counties make up the remainder of currently planned

reuse systems.

•  Reinforcing the trend toward urban reuse, the large

majority of activity is in the more populated coastal

counties and greater metropolitan areas of Los Angeles,

San Francisco, and San Diego.

•  Eight projects greater than 45,000 m3/d are planned for

Los Angeles County, headlined by the Joint Water

Pollution Control plant and the Hyperion MBR project

which are system upgrades.

Analysis

Circle size represents planned

capacity additions, million m3/d

Planned Reuse Projects in California by County

Source: Bluefield Research

California)Municipal)Wastewater)Treatment)&)Reuse:)Market'Drivers,'Trends,'and'Outlook'

ADVANCED WATER TREATMENT & DESALINATION

DATA INSIGHT

21

SoCal Represents Market Epicenter

California’s 2.3 million m3/d project pipeline is dominated by Los Angeles County, where urban water

use, population growth, and drought combine for the greatest demand.

San Diego .378

Riverside .227

San Bernardino .174

Stanislaus .075

Santa Clara .113

Fresno .037 San Francisco

.022

Orange .022

Sacramento .018

Monterrey 15.1

Yolo .011

Contra Costa .0113

Marin <.01

Merced <.01

Napa <.01

Ventura <.01

Los Angeles 1.222

Geographically, more than 94% of California’s project

pipeline is located in seven counties

•  Seven counties, led by Los Angeles, have more than

37,000 m3/d in planned capacity additions. Another 11

counties make up the remainder of currently planned

reuse systems.

•  Reinforcing the trend toward urban reuse, the large

majority of activity is in the more populated coastal

counties and greater metropolitan areas of Los Angeles,

San Francisco, and San Diego.

•  Eight projects greater than 45,000 m3/d are planned for

Los Angeles County, headlined by the Joint Water

Pollution Control plant and the Hyperion MBR project

which are system upgrades.

Analysis

Circle size represents planned

capacity additions, million m3/d

Planned Reuse Projects in California by County

Source: Bluefield Research

California)Municipal)W

astewater)Treatment)&)Reus

e:)Market'Drivers,'Trends,'

and'Outlook'

ADVANCED WATER TREATMENT & DESALINATION

DATA INSIGHT

21

SoCal Represents Market Epicenter

California’s 2.3 million m3/d project pipeline is dominated by Los Angeles County, where urban water

use, population growth, and drought combine for the greatest demand.

San Diego

.378

Riverside

.227

San Bernardino

.174

Stanislaus

.075

Santa Clara

.113

Fresno

.037 San Francisco

.022

Orange

.022

Sacramento

.018

Monterrey

15.1

Yolo .011

Contra Costa

.0113

Marin <.01 Merced

<.01

Napa <.01

Ventura

<.01

Los Angeles

1.222

Geographically, more than 94% of California’s project

pipeline is located in seven counties

•  Seven counties, led by Los Angeles, have more than

37,000 m3/d in planned capacity additions. Another 11

counties make up the remainder of currently planned

reuse systems.

•  Reinforcing the trend toward urban reuse, the large

majority of activity is in the more populated coastal

counties and greater metropolitan areas of Los Angeles,

San Francisco, and San Diego.

•  Eight projects greater than 45,000 m3/d are planned for

Los Angeles County, headlined by the Joint Water

Pollution Control plant and the Hyperion MBR project

which are system upgrades.

Analysis

Circle size represents planned

capacity additions, million m3/d

Planned Reuse Projects in California by County

Source: Bluefield Research

California)Municipal)Wastewater)Treatment)&)Reuse:)Market'Drivers,'Trends,'and'Outlook'

ADVANCED WATER TREATMENT & DESALINATION

DATA INSIGHT

14

Shifts Along the Technology Adoption Curve

Relative Technology Adoption and Applications of Reclaimed Water

Urban applications to drive demand for more advanced water treatment technologies.

•  Increasing pressure on the state’s water supplies has initiated moves towards potable reuse– direct and indirect– driving market potential for more advanced treatment technologies (e.g. MF, RO, UV) capable of ensuring higher water quality.

•  Reverse osmosis is currently the go-to technology for indirect potable reuse as project planners look to successful RO reuse systems like the groundwater recharge facility in Orange County.

•  There are 17 planned reuse projects with a combined capacity of 1.2 million m3/d that have indicated they will use RO treatment technology.

•  A further 11 projects with a combined capacity of 317,000 m3/d will use membrane bioreactor (MBR) treatment technology.

•  With greater adoption of RO and MBR there will be adoption of complementary technologies like microfiltration (MF) and ultraviolet disinfection (UV).

•  Another 39 projects have yet to reach the technology selection phase and are listed as to be determined.

Analysis

The trend toward more urban and industrial applications underpins a movement toward advanced membrane technologies.

Direct Potable Reuse

Indirect Potable Reuse / Groundwater Recharge

Industrial

Public Landscaping

Agriculture

Conventional Treatment

Reverse Osmosis

Membrane Bioreactor

Time

-

10

20

30

40

50

To B

e Det

erm

ined

Micr

ofiltr

ation

Rever

se O

smos

is

Distrib

ution

Sys

tem

Ultrav

iolet

Mem

bran

e Bior

ecac

tor

Stora

ge

Nu

mb

er o

f P

roje

cts

Planned Project Technology Selection, 85 Projects

Projects use multiple technologies, thereby resulting in the double counting

of projects

Source: Bluefield Research

Report'Title:'Sub$tle(

ADVANCED WATER TREATMENT & DESALINATION

MARKET INSIGHT

13

Texas State Water Plan Projected Wastewater Reuse

The current state water plan calls for a 55% (1.4 million m3/d) growth in wastewater reuse capacity between 2020 and 2070.

•  While these forecasts portend a major build out in wastewater reuse infrastructure, they are likely overly optimistic as Texas has not yet met the 2010 predictions for wastewater reuse laid out in their 2007 and 2012 State Water Plans. •  In order to meet the forecasted 2020 reuse levels, Texas will have to expand reuse capacity 56%, up from its current rate of 1.05 million m3/d. Since the 2007, when an extensive wastewater reuse plan was first included in the State Water Plan, Texas has been steadily revising down its forecasted wastewater reuse. •  Bluefield research expects that this revision does not reflect a slowing down of the reuse market but rather reflects a more realistic understanding of the timeline to commission reuse projects.

•  The downward revision also reflects Texas’s failure to reach past reuse targets, which were overly optimistic given the existing regulatory, planning, and financing environments. •  In order for water projects to qualify for state funding, they must be included in the state water plan, leading local water authorities to map out specific reuse projects.

Analysis

0

1

2

3

4

5

6

2010 2020 2030 2040 2050 2060 2070

m3 /

d (

mill

ion

)

2007 State Water Plan

2012 State Water Plan

2017 State Water Plan (preliminary)

Shifting Expectations for Reuse in the State Water Plan

The preliminary estimate from the 2016 regional water plans calls for water reuse supplies to reach 3.9 million m3/d by

2070, an ambitious goal considering the current wastewater reuse rate of 1.05 million m3/d.

Current Reuse Levels (est)

Source: Texas Water Development Board (TWDB), Bluefield Research

Bluefield Takeaways

•  What is the size and forecast of the US municipal reuse market by state, application, and CAPEX?

•  Where do greenfield opportunities exist in the for wastewater reuse?

•  Which projects in the pipeline are most likely to be realized? •  Which states or municipalities offer the most favorable

environment for pursuing reuse strategies? •  How are state and federal policies altering forecast outlook? •  What is the demand for treated municipal wastewater from

industrial sectors such as power, private industry, and mining re-shaping the ownership landscape?

Key Questions Addressed in Report

ADVANCED WATER TREATMENT & DESALINATION

US Municipal Wastewater & Reuse: Market Trends, Opportunities, & Forecasts, 2015-2025 FOCUS REPORT

Table of Contents

3

Section 1 – Executive Summary 7  Summary 8  Summary, Continued 9  The US Municipal Wastewater Landscape, 2015-2025 10  Wastewater Reuse in the US in a Global Context 11  Current State of Reuse in the US 12  Wastewater Reuse Applications in the US 13  US Treated Wastewater Utilization 14  US Market Attractiveness - Evaluating the Opportunity 15  Historical Growth Trend

Section 2 – US Regulatory Landscape 17  Summary – Policy Landscape 18  State Policy Landscape: Drivers & Inhibitors 19  Water Rights Impact Reuse Habits, Opportunities 20  State Revolving Funds Underpin Project Financing 21  State Water Plans Set Stage for Long Term Water Management 22  California, Texas, at Forefront of Direct Potable Reuse Deployment 23  The Profile of Potable Reuse at Cusp of Change 24  Water Scarcity Prompts Demand Side Restrictions 25  Drought Prompts Allocation of Emergency Funds for Reuse Projects

Section 3 – Market Drivers and Trends 27  Summary 28  State and Regional Market Trends Driving Reuse 29  Population Growth Drives Increasing Demand for Reuse 30  Water Stressed Hotspots Drive Adoption 31  Reuse Cost Challenges Legacy, Desalination Supplies 32  Models for Reuse Treatment Systems 33  Water Risks Drive Industry to Alternative Solutions 34  Power Sector Drought Proofs Water Supply 35  Fracking Firms Seek Municipal Wastewater for Operations

Section 4 – Technology & Cost Trends 37  Summary 38  Advanced Water Treatment Technology Adoption 39  Wastewater Reuse Plants CAPEX Costs

Section 5 – US Municipal Wastewater Market Forecasts 41  Summary 42  Forecast Methodology 43  Municipal Wastewater & Reuse Capacity Forecasts, 2015-2025 44  Forecasted Capacity Addition by Application, 2015-2025

Section 5 (continues) 45. State-by-State Capacity Forecasts, 2015-2025 46. Municipal Wastewater & Reuse CAPEX Forecasts, 2015-2025 47. Treatment CAPEX Forecasts by Application, 2015-2025

Section 6 – Competitive Landscape 49  Summary 50  Company Value Chain Positioning 51  Miami-Dade Highlights Stiff Competition for Reuse Project 52  RO Suppliers Position for Potable Reuse

Section 7 – California Market Analysis 54  Summary 55  Intensifying Drought Conditions Across California 56  Regulatory Environment Evolves in Face of Deteriorating Conditions 57  Population Growth Heightens the Long-Term Challenge 58  California’s Demand-side Challenge 59  Reclaimed Water Utilization by Sector 60  Wastewater Reuse Growth Hinges on Urban Water Suppliers 61  Wastewater Treatment Plant Capacity and Unused Effluent Flows by County 62  Ocean Outfalls Reflect Untapped Reuse Potential 63  SoCal Represents Market Epicenter

Section 8 – Florida Market Analysis 65  Summary 66  Florida Experience Demonstrates Policy Impacts on Build-Out 67  State Policy Initiatives Fundamental to Sector Growth 68  Ocean Outfall Legislation Planned Investment Underway 69  Miami–Dade OOL Compliance Planned Capital Investment Breakdown 70  Wastewater Flows and Reuse by County 71  Florida’s Wastewater Reuse Off-takers by Segment

Section 9 – Texas Market Analysis 73  Summary 74  Drought cycles and Impacts on Wastewater Reuse 75  Water Demand by Sector 76  Water Demand and Wastewater Reuse by Sector 77  Urban Areas Provide Opportunity for Wastewater Reuse 78  State Policy Initiatives Provide Support for Reuse Expansion 79  Market Conditions Unique to Texas 80  Texas at Forefront of Direct Potable Reuse 81  State Water Plan Planned Investment 82  Water Regions Dialing Back Reuse Plans, Reflecting Market Realities 83  Reuse Projects Apply for SRF, SWIFT Funding

ADVANCED WATER TREATMENT & DESALINATION

US Municipal Wastewater & Reuse: Market Trends, Opportunities, & Forecasts, 2015-2025 FOCUS REPORT

Table of Contents, continued

Georgia

Oklahoma

New Mexico

Nevada

Texas •  Region A: Amarillo •  Region B: Wichita Falls, Vernon, Burkburnett •  Region C: Dallas-Fort Worth •  Region D: Texarkana, Greenville, Marshall •  Region E: El Paso •  Region F: Midland, Odessa, San Angelo •  Region G: Abilene, Waco, Cedar Park... •  Region H: Houston, Galveston •  Region I: Brownsboro, Elkhart •  Region J: Del Rio, Kerrville •  Region K: Austin •  Region L: San Antonio, Victoria, Seguin •  Region M: Laredo •  Region N: Corpus Christi, Portland •  Region O: Lamesa, Lubbock. Levelland •  Region P: El Campo, Yoakum

Arizona •  Phoenix AMA •  Pinal AMA •  Tucson AMA

California •  East Bay MUD •  Sacramento Regional County

Sanitation District •  San Francisco •  Los Angeles County Sanitation

District •  Los Angeles •  Orange County Sanitation District •  Inland Empire Utilities District •  San Diego

Colorado

Florida •  Northwest Florida WMD •  St Johns River WMD •  South Florida WMD •  Southwest Florida WMD •  Suwannee River WMD

Section 10 – 41 State and Water District Profiles (pages 85-125)

Section 11 – Planned Projects (pages 125-135) APPENDIX; Project Data, Industrial Off-takers Forecasts Data (xls)

American Water � Abengoa � AECOM � Allen Plummer and Associates � AKM Consulting Engineers � American Water � Arcadis � BiWater � Black and Veatch � Bowen Engineering � Brasfield and Gorrie � Brown and Caldwell � Carollo � CDM Smith � Ceinsa USA � CH2M Hill � Chevron � China Gezhouba Group (CGGC) � Cintra � CW Roen � Dow � Dragados USA � Dudek � Eagle Contracting LP � Edgemoor/Clark � Electra Therm � Evoqua � GAI Consultants � Garney Holding Co. � GE � GHD Inc � Harvest Power � Haskell � Hatch Mott MacDonald � Hazen and Sawyer � HDR � Hydranautics � IDE Technologies � JR Filanc � Kennedy Jenks � Kiewit � Klienfelder � Koch Membrane Systes � Layne � M3 Capital Partners � McCarthy Construction � Meridiam Infrastructure � Michael Baker International � Mittauer & Associates Inc. � MWH � ONEFCO � Odebrecht � Overaa � Ovivo � Pall � Parsons � PCL Construction � WSP � Pepper Construction � PERC � Poseidon Water � Reiss Engineering � RMC Water and Environment � RTD Construction � Severn Trent Services � SJ Amoroso � Skanska � Slayden Construction � South Dade Soil & Water Conservation District � Suez Environment � Synagro Inc � Tetra Tech � Toray � Trojan UV � Trussell Technologies � Ulliman Schute � United Water � Veolia � The Walsh Group � West Yost � Woodard and Curran � Wharton Smith � W.M. Lyles � WPC Industrial Contractors Inc � Xylem

KEY COMPANIES MENTIONED

!!!!!!US!Municipal!Wastewater!&!Reuse:"Market'Trends,'Opportuni2es,'&'Forecasts,'2015:2025'

ADVANCED WATER TREATMENT & DESALINATION

FOCUS REPORT

14

US Market Attractiveness Drivers

Policy Drivers

Available Funding

Historical Experience

Water Scarcity

Market Attractiveness

California High

Florida High

Texas High

Arizona Medium

Colorado Medium

Georgia Medium

Oklahoma Medium

Nevada Low

New Mexico

Low

Market Inhibitor Limited Impact Improving Conditions Market Driver

Acute water stress shapes near-term development.

•  California’s extreme drought conditions have sparked a wave of infrastructure investment and planned reuse projects.

•  Texas has undergone a significant shift after recent rainfall, moving it from a near-term to long-term market opportunity, strengthened by a transparent water plan focused on statewide water risks.

•  More than US$1.98 billion of funding for reuse has been made available in California and Texas to address drought.

Policy measures impact long-term outlook.

•  Florida has made wastewater reuse development a state-wide priority since 1989 to mitigate aquifer saltwater intrusion and environmental contamination. Regulators continue to pass reuse initiatives, including the 2013 mandate that the Florida Department of Environmental Protection produce a feasibility study to expand reuse.

•  Arizona’s water management strategy focused on banking water limits its overall opportunity for other applications.

•  Nevada policies are dictated by Colorado River entitlements and capturing credits by returning water back to surface water sources.

Distinct regulatory environments, infrastructure investment, and water environments segment the markets of opportunity.

Source: Bluefield Research

Analysis

!!!!!!US!Municipal!Wastewater!&!Reuse:"Market'Trends,'Opportuni2es,'&'Forecasts,'2015:2025'

ADVANCED WATER TREATMENT & DESALINATION

FOCUS REPORT

Nine Leading States

Potable vs.

Non-Potable

Reclaimed Water

Applications

Potable Reuse

Regulations

Water Stressed

US States*

US Global Footprint

2015

Mar

ket

Lan

dsc

ape

2015

– 2

025

Mar

ket

U

S O

utl

oo

k

Potable vs.

Non-Potable

Capacity Additions

Capital Expenditures

The US Municipal Wastewater Landscape, 2015-2025 The US$9.6 billion outlook for US municipal reuse is built on a series of critical factors already in place in 2015, including more than 247 projects in the development pipeline.

Treatment Systems

46% Pipe

Networks 48%

Other 6%

US9.6 Billion

Florida 55%

California 27%

Texas 6%

Other States 12%

8.9 Million m3/d

Non-Potable 73%

Potable 27%

8.9 Million m3/d

Rest of World 62%

US 38%

9 States 93%

41 States 7%

Irrigation 66%

Industry 16%

Potable 15%

No Regulations 39 States

Limited Stress 70.4%

IPR Regulations 11 States

Moderate to Exceptional Drought

29.6%

Indirect Potable Reuse 99%

Note: Water Stress was measure in May 2015 Source: NOAA, Bluefield Research

9

!!!!!!US!Municipal!Wastewater!&!Reuse:"Market'Trends,'Opportuni2es,'&'Forecasts,'2015:2025'

ADVANCED WATER TREATMENT & DESALINATION

FOCUS REPORT

45

State-by-State Capacity Forecasts, 2015-2025

0

200

400

600

800

1,000

1,200

1,400

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

M3 /

d (

tho

usa

nd

s)

Rest of the US

New Mexico

Oklahoma

Georgia

Arizona

Nevada

Colorado

Texas

California

Florida

•  Bolstered by Miami- Dade wastewater infrastructure

projects through 2025 Florida will add 4.9 million m3/d of capacity. Florida Power and Light’s (FPL) Turkey Point Nuclear Power Plant offtake from the Miami-Dade South District wastewater plant will account for 340,700 m3/d of capacity by 2021.

•  California will represents 27% of total additions that will increase if drought conditions persist, but the real impact of San Diego Pure Water plant will be after the forecast period when the remaining 219,600 m3/d is expected by 2035.

•  California’s ramp up in 2025 is driven by several large scale projects set to come online including the 216,000 m3/d Hyperion MBR project.

•  The near-term Texas forecast has been pushed back to account for the 2015 rains, but political and industrial momentum will enable momentum more than 560,000 m3/d of additions through 2025.

•  Outside of the leading states, the remainder will add 1.0 million m3/d, led by Colorado’s 400,000 m3/d.

Analysis

Florida and California represent 82%, or 7.3 million m3/d, of total forecasted capacity additions through 2025, building on their significant share of current capacity to date.

Forecasted Wastewater Reuse Capacity Additions by State

Source: Bluefield Research

4

ADVANCED WATER TREATMENT & DESALINATION

US Municipal Wastewater & Reuse: Market Trends, Opportunities, & Forecasts, 2015-2025 FOCUS REPORT

5

Focus Report Exhibits Section 1 – Executive Summary

9  The US Municipal Wastewater Landscape, 2015-2025 10  Global Wastewater Reuse Volumes 11  Reused Wastewater Flows in the US by State, 2014 12  Reused Wastewater Applications in the US by State, 2014 13  Reused Wastewater Utilization in the US by State, 2014 14  State Ranked Market Attractiveness 15  US Reused Wastewater Flows 1995-2015

Section 2 – US Regulatory Landscape 18  Wastewater Reuse Policy Landscape 19  Water Rights Impact Reuse Habits, Opportunities 20  State Revolving Funds Underpin Project Financing 21  State Water Plans Set the Stage for Long Term Water Management 22  States with Indirect Potable Reuse Regulations 23  Potable Reuse Capacity Additions 23 Key Direct Potable Reuse Planned Projects 24  Water Scarcity Prompts Demand Side Restrictions 25  Drought Emergency Water Funding Programs

Section 3 – Market Drivers and Trends 28  State and Regional Market Trends Driving Reuse 29  Forecasted Population Growth 30  Drought Conditions Across the US, May 2015 31  Supply Comparison: MWD Rates vs. Alternative Sourcing Costs 32  Models for Reuse Treatment Systems 33  Municipal Off-take – Industrial Projects by Sector 33  Reclaimed Water Flow by Sector 34  Proposed Thermal Power Additions by US State Through 2020 34  Number of Plants Utilizing Wastewater Reuse 35  Fracking Firms Seek Municipal Wastewater for Operations

Section 4 – Technology and Cost Trends 38  Advanced Treatment Technologies 39  Water Reclamation Treatment facility CAPEX Costs 39  CAPEX Breakdowns

Section 5 – US Municipal Wastewater Market Forecasts 42  Forecast Methodology 43  Forecasted Municipal Wastewater Reuse Capacity by Application 44  Forecasted Potable Reuse Capacity Additions 45  Forecasted Wastewater Reuse Capacity Additions by State 46  Forecasted Wastewater Reuse CAPEX 47  CAPEX Spend on Treatment Technologies

Section 6 – Competitive Landscape 50  Company Value Chain Positioning 51  Expression of Interest(EOI) Submissions 52  Market Share for RO Membrane Suppliers for Potable Reuse

Section 7 – California Market Analysis 55  April 2015 Drought Intensity 55 Top 10 Counties by Forecasted Population Growth 56  Regulatory Environment Evolves in Face of Deteriorating Conditions 57  California Urban Water Outlook, Forecasted Demand Impact 2015-2040 58  Urban Water Usage Reductions via Voluntary Restrictions, 2014-2015 59  Reclaimed Water Applications by Sector – by Flows 60  California Urban Water Supplier Current & Planned Sources, 2010-2035 61  Wastewater Treatment & Reuse Capacity Segmentation by Plant 61  Wastewater Volume Discharged (Not Reused) by County 62  California Ocean Outfalls by Region and Flows 63  Planned Reuse Projects in California by County

Section 8 – Florida Market Analysis 66  Florida Wastewater & Reuse Capacity, 2000-2014 67  Key Policy Drivers, 1989-2014 68  Planned Ocean Outfall Projects 69  Planned Investment for Miami-Dade OOL Compliance by Year 70  Wastewater Volume by County Recharged (Not Reused) 70  Wastewater Utilization, 2013 71  Reused Water Off-takers by Segment

Section 9 – Texas Market Analysis 74  Texas Drought: 2011 to 2015 by County 75  Projected State Water Demand by Sector, 2020-2060 76  Texas Wastewater Flows 76  Municipal Reclaimed Water Application (2015) 77  Wastewater Volume by County Discharged (Not Reused) 78  State Policy Initiatives Provide Support for Reuse Expansion 79  Market Conditions Unique to Texas 80  Direct Potable Reuse Projects 81  2012 State Water Plan Capacity Additions and Planned Spend 82  Shifting Expectations for Reuse in the State Water Plan 83  Water Reuse Funding Applications by Water Planning Region

Section 10 – State and Water District Profiles

ADVANCED WATER TREATMENT & DESALINATION

US Municipal Wastewater & Reuse: Market Trends, Opportunities, & Forecasts, 2015-2025 FOCUS REPORT

Appendix: US Municipal Wastewater & Reuse

Purchasers receive the report’s complete US Municipal Wastewater & Reuse Appendix, which includes:

Planned Reuse Systems

US Market Forecast Data

•  Project Name •  Current Project Status •  Project Location •  Project Timing & Status •  Planned Capacity (m3/d) •  Planned Investment US$, million

Wastewater Treatment Systems by State

•  US Capacity Forecasts, 2015-2025 •  State-by-State Capacity Forecasts, 2015-2025 •  CAPEX Forecasts, 2015-2025 •  Technology Forecasts, 2015-2025

•  Wastewater Flows •  Reuse Capacity by Water District •  More than 100 Industrial Off-takers and

Flows

6

Industrial Reclaimed Water Users

•  Company •  Locations •  Reclaimed Water Supplier •  Industrial Sector •  Flow (m3/d)

ADVANCED WATER TREATMENT & DESALINATION

US Municipal Wastewater & Reuse: Market Trends, Opportunities, & Forecasts, 2015-2025 FOCUS REPORT

SoCal Represents Market Epicenter

California’s 2.3 million m3/d project pipeline is dominated by Los Angeles County, where urban water use, population growth, and drought combine for the greatest demand.

San Diego .378

Riverside .227

San Bernardino .174

Stanislaus .075

Santa Clara .113

Fresno .037

San Francisco .022

Orange .022

Sacramento .018

Monterrey 15.1

Yolo .011

Contra Costa .0113

Marin <.01

Merced <.01

Napa <.01

Ventura <.01

Los Angeles 1.222

Geographically, more than 94% of California’s project pipeline is located in seven counties

•  Seven counties, led by Los Angeles, have more than 37,000 m3/d in planned capacity additions. Another 11 counties make up the remainder of currently planned reuse systems.

•  Reinforcing the trend toward urban reuse, the large majority of activity is in the more populated coastal counties and greater metropolitan areas of Los Angeles, San Francisco, and San Diego.

•  Eight projects greater than 45,000 m3/d are planned for Los Angeles County, headlined by the Joint Water Pollution Control plant and the Hyperion MBR project which are system upgrades.

Analysis

Circle size represents planned capacity additions, million m3/d

Planned Reuse Projects in California by County

Source: Bluefield Research

SAMPLE EXHIBIT

7

ADVANCED WATER TREATMENT & DESALINATION

US Municipal Wastewater & Reuse: Market Trends, Opportunities, & Forecasts, 2015-2025 FOCUS REPORT

Florida Wastewater Treatment and Reuse Additions

0

2

4

6

8

10

12

M3 /

d (

mill

ion

)

Wastewater Treatment Capacity

Reuse Capacity

Retrofits and add-ons to existing wastewater treatment plants represent the lion’s share of capacity additions.

•  Installed reuse capacity has increased 3% year-over-year, compared to 1% average annual increase in wastewater treatment capacity.

•  There are approximately 2,000 domestic wastewater facilities in the state of Florida permitted by the Department of Environmental Protection, with a combined capacity of over 9.5 million cubic meters per day (m3/d).

•  Only 18% of permitted treatment facilities have a capacity of over 1,892 m3/d but account for 96% of total permitted domestic wastewater treatment in the state.

•  Estimated capacity additions in 2014 brings the total to 6.6 million m3/d of reuse capacity.

Analysis

Since 2000, installed reuse capacity in Florida has grown 52%, reaching 6.6 million m3/d in 2014, outpacing installed wastewater treatment capacity, which grew only 17% over the same period.

Florida Wastewater & Reuse Capacity, 2000-2014

Source: Florida Dept. Of Environmental Protection, Bluefield Research

SAMPLE EXHIBIT

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ADVANCED WATER TREATMENT & DESALINATION

US Municipal Wastewater & Reuse: Market Trends, Opportunities, & Forecasts, 2015-2025 FOCUS REPORT

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US Municipal Wastewater & Reuse: Market Trends, Opportunities & Forecasts, 2015-2025 Publication Date: July 2015

This Focus Report highlights the following:

•  A 2015–2025 forecast of municipal wastewater reuse in the US by key state, capital investment, and technology adoption totaling $11.0B of CAPEX

•  Bottom-up assessment of the 247 projects in the pipeline by state and status

•  In-depth analysis of state and federal regulatory environments influencing the deployment of wastewater reuse

•  More than 40 profiles and analysis of 9 key states and 32 water districts.

•  Industrial users of reclaimed water and trends for greater adoption

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ADVANCED WATER TREATMENT & DESALINATION

US Municipal Wastewater & Reuse: Market Trends, Opportunities, & Forecasts, 2015-2025 FOCUS REPORT

ADVANCED WATER TREATMENT & DESALINATION INSIGHT SERVICE

CLIENT FOCUS: This Insight Service is designed for companies involved in the supply, purchase or integration of water and wastewater treatment technologies, including:

•  Municipal and water utilities tracking new players and technologies •  Business development and strategy executives at manufacturers and

integrators of water and wastewater treatment systems, components •  EPC and water project developers seeking new supply relationships or

strategic or vertical partnerships •  Large industrial water users searching for optimal supply solutions •  Investors targeting new business models in water treatment and re-use

RESEARCH COVERAGE: a 12-month cycle of data- and analytics-driven research provided in multiple formats to support client strategies, covering:

•  Desalination market trends including new projects, emerging brackish water applications, and cost drivers

•  Growth of water and wastewater treatment markets by segment (membrane, chemical, thermal, etc), by vertical market, and by region

•  Water re-use strategies and market acceptance by sector •  In-depth insight into industrial treatment markets including mining, oil &

gas, fracking, power, agriculture, and manufacturing •  Technology trends in materials, processes, and energy efficiency •  Supplier rankings and market share by segment and region •  Supply chain shifts and tracking of new entrants

METRICS: primary research and analysis is supported by proprietary market, project and company databases updated continuously:

•  WT, WWT and desalination project databases (technology, supplier) •  EPC and equipment supplier databases •  Industrial segment project databases (mining, O&G, power, etc) •  Rigorous market forecasts detailing models, assumptions, and detailed

scenarios

Insight Service Description

WATER SOLUTIONS COVERED:

Business Models

Cost Drivers

M&A Activity

Regulatory Activity

Market Share

MARKET SEGMENTS COVERED:

Industrial Water Municipal Water •  Power Gen •  Oil & Gas •  Mining •  Chemicals •  Food & Beverage Water Reuse

Water Treatment

Wastewater Treatment Desalination

Agriculture

SELECT LIST OF COMPANIES COVERED:

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US Municipal Wastewater & Reuse: Market Trends, Opportunities, & Forecasts, 2015-2025 FOCUS REPORT

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Global companies across the value chain are developing strategies to capitalize on greenfield opportunities in water -- new build, new business models, and private investment. Bluefield Research supports a growing roster of companies across key technology segments and industry verticals addressing risks and opportunities in the new water landscape. Companies are turning to Bluefield for in-depth, actionable intelligence into the water sector and the sector's impacts on key industries. The insights draw on primary research from the water, energy, power, mining, agriculture, financial sectors and their respective supply chains. Bluefield works with key decision-makers at utilities, project development companies, independent water and power providers, EPC companies, technology suppliers, manufacturers, and investment firms, giving them tools to define and execute strategies.

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