Municipalities face growing pressure to manage their resources effectively, and energy costs at wastewater treatment plants (WWTPs) are among the largest expenses. These facilities can account for up to 40% of a municipality’s total energy use. In high-cost electricity states like California, New York and Massachusetts, energy bills for a single large WWTP can exceed $6 million annually.

What Defines Small, Medium and Large WWTPs?

WWTPs vary in size and energy consumption:

• Small WWTPs: Serve fewer than 50,000 people and consume 5 million to 15 million kilowatt-hours (kWh) annually.
• Medium WWTPs: Serve between 50,000 to 100,000 people and consume 15 million to 30 million kWh annually.
• Large WWTPs: Serve over 100,000 people and consume 30 million to 60 million kWh annually.

For this analysis, we use benchmark figures reflecting typical energy use and rates in high-cost states.

The Cost of Inaction: Rising Energy Prices and Budget Impact

Electricity prices are unpredictable, but a 3% annual increase is a conservative estimate based on historical trends. Costs for capacity, transmission and regulatory charges often rise faster than market electricity prices.

The below chart outlines the projected energy cost escalation for a large WWTP over a 30 year period, assuming an electricity rate range of $0.20 to $0.30 per kWh, reflecting high to very high-cost regions. The total additional energy cost over 30 years equals $54 million to $81 million.

Without action, municipalities could see annual energy costs more than double, straining public budgets.

The Opportunity: How Energy Efficiency and Renewables Deliver Big Savings

Municipalities can reduce costs and risk through three key strategies:

1. Energy Efficiency Projects

Efficiency upgrades such as LED lighting, HVAC optimization, control systems and high-efficiency pumps can cut energy use by 10% to 35%.

Estimated 30-year savings:

• Small WWTPs: $8M - $15M
• Medium WWTPs: $12M - $25M
• Large WWTPs: $18M - $36M
  
  

2. Renewable Energy & On-Site Generation

On-site generation solutions can significantly lower energy costs while improving grid independence. WWTPs can leverage:

• Solar Photovoltaics (PV) and battery storage to reduce peak energy demand and increase reliability.
• Wind Power, where feasible, to generate clean electricity and offset grid purchases.
• Digester Gas (biogas) recovery, using methane produced in wastewater treatment to generate onsite electricity and heat.
• Microgrids, combining multiple generation sources for energy resilience and cost control.

Estimated 30-year savings:

• Small WWTPs: $12M - $18M
• Medium WWTPs: $20M - $30M
• Large WWTPs: $28M - $40M
  
  

3. Commodity Procurement & Risk Management

Strategies like power purchase agreements (PPAs), hedging and risk management contracts stabilize energy costs and reduce volatility.

Estimated 30-year savings:

• Small WWTPs: $5M - $10M
• Medium WWTPs: $8M - $15M
• Large WWTPs: $12M - $20M
  
  

Combining energy efficiency upgrades, on-site renewable generation, and strategic commodity procurement yields tremendous compounding savings over 30 years — exceeding $30 million for small WWTPs, $50 million for medium facilities, and $80 million for large plants. This transformational scale of savings significantly bolsters long-term financial resilience.

Conclusion: The Financial Case for Acting Now

For WWTPs of all sizes, delaying energy-saving investments could result in millions of dollars in avoidable costs over 30 years. Even with uncertainties in energy pricing and regulations, the risk of inaction is clear: higher bills, budget strain and lost reinvestment opportunities.

By acting now, municipalities can:

• Control long-term costs through efficiency, renewables and procurement strategies.
• Future-proof operations against rising electricity prices and regulatory changes.
• Demonstrate fiscal and environmental leadership.

Financing Solutions

Municipalities have multiple funding options for energy projects:

• Federal Grants and Incentives: Assistance in securing funding.
• Guaranteed Energy Savings Performance Contracts (ESPCs): Projects funded by guaranteed savings.
• Power Purchase Agreements (PPAs): Third-party ownership of energy assets with long-term cost savings.
• Energy-as-a-Service (EaaS): No upfront capital investment; private partners own and operate infrastructure.
• Turnkey Solutions: Full-service program and project delivery, from concept to post-operation monitoring.

By leveraging these funding mechanisms, municipalities can implement cost-saving projects without burdening their budgets, securing long-term savings while improving resilience.