For a city that prides itself on its high-tech vision and green policies, Palo Alto's sewage-treatment operation has long been a source of embarrassment.

The city is one of the last in the state to use incinerators to destroy its sewage sludge. The largely obsolete technology produces hazardous ash containing copper, which has to be shipped to a landfill. For local environmentalists and city officials, these incinerators can't be retired soon enough.

Now, the city is finalizing a plan to do just that. Public Works staff and consultants are preparing an ambitious long-range plan for the Regional Water Quality Control plant, which provides services to Palo Alto, Mountain View, Stanford University, Los Altos, Los Altos Hills and the East Palo Alto Sanitary District. The goal of the document is to create a roadmap for scrapping the 40-year-old technology and for replacing it with one that converts waste into energy.

According to the draft plan, the process won't be cheap or easy. The documents states that repairs and replacements will "require a significant investments in the next 15 years." Phil Bobel, assistant director of public works, estimated that renovating the wastewater plant and replacing the aged equipment could cost as much as $250 million. Meeting potential federal and state regulations -- including new requirements for recycled-water use, incineration limits, and air-emissions regulations -- could add another $150 million to the price tag. The price would be split among the partner agencies and would likely be funded through either a bond or a low-interest state loan, Bobel said.

Bobel and Jamie Allen, manager of the plant, both said the existing equipment is showing signs of extreme wear and has exceeded its design life.

"Renovation and rehabilitation is needed," Bobel said. "You can't mess around with a facility like this. It needs to operate 24/7."

While safety is one factor, the environment is another. The report notes that "the public has expressed concern over use of an incineration process."

"Therefore, the recommendation of this LRFP (Long Range Facilities Plan) is to retire the existing incineration process as soon as a new solids process can be selected and implemented."

Bobel said the future of the regional plant is "resource recovery from wastewater." The draft reports identifies several options for extracting energy from sewage sludge. One process, known as gasification, refers to heating up sludge in an oxygen-free container. This creates a gas that can be converted to electricity or renewable diesel. Allen said the process is long established but it's new in the United States when it comes to sewage-sludge treatment.

The other option is wet anaerobic digestion, a process in which microorganisms break down waste and create energy, which can be either gas or electricity. Palo Alto is already considering building an anaerobic digester to process local food waste and yard trimmings. The project, which has split the environmental community, received a major boost last November, when voters approved the "undedication" of a 10-acre site in the Baylands to accommodate the new facility.

Former Mayor Peter Drekmeier, who led the campaign to undedicated the parkland, praised the city's effort to upgrade its sewage facilities and encouraged the city to better integrate the two efforts (replacing the wastewater plant and building a new compost facility). Drekmeier advocated "scaling up" the digester to include food waste and said there are "great cost savings in energy-production potential."

"In nature, every waste product is used by something else," Drekmeier said. "We're definitely on the right track."

The council did not take any action on the plan, though several members said they were excited about the movement to replace the aged equipment at the plant. Bobel said staff would try to blend the two projects and return to the City Council in July with a schedule for moving forward. He said the long-range plan for the regional wastewater plant is necessary to create a "path" for moving forward on the needed upgrades.

"We need the ultimate plant layout so we can sequence and make expenditures in the right order," he said.

The council was also scheduled to discuss on Monday night the Lytton Gateway development, a four-story, mixed-used project that would stand on the corner of Lytton Avenue and Alma Street. Members voted 8-1 shortly after 10 p.m. to postpone the item to May 14.