The plant processes sludge in its anaerobic digesters. The gas fuels a 5-MW cogeneration system that provides much of the site's electricity as well as heat for the digestion process.
One of the interesting things about this process is that the district is trying to maximize gas production (which amounted to about $800,000 worth of energy last year, based on market prices; when natural gas prices were higher in 2008, the district produced $1.8 million worth) by urging people to grind food waste in garbage disposals and return it to the district via wastewater rather than throw food waste in the garbage and have it hauled off to the landfill. This is part of their Food Is Fuel public information effort.
The Food is Fuel program notes that the average family of four generates nearly 2,000 lbs. of food waste per year. Food waste is mostly water, so it makes sense to grind it and send it to the water reclamation plant. Here's how it works: food scraps produce methane gas that MMSD captures and converts to power that runs the plant. Those food scraps are also used to make fertilizer.
The methane production/use program has been so successful that MMSD is researching ways to expand it.