I think the issue with most municipalities would be having enough elevation/outflow to generate power. I found one city in California that is doing this but they actually generate a lot more power from methane capture even though they have a 90 foot drop in their outflow of treated water.
Source: Energy Efficiency Program | Wastewater
The Point Loma Wastewater Treatment Plant is located on a bluff above the Pacific Ocean. The treated wastewater or effluent is discharged into the ocean through a 4.5 mile ocean outfall after a 90-foot drop from the plant to the ocean outfall. A 1,350 kilowatt hydroelectric plant captures the energy of the treated wastewater as it flows down the outfall connection. The power plant, partially funded by a grant from the California Energy Commission, can produce an additional 1.35 megawatts for sale to the San Diego electric grid, enough power to supply energy to 1,300 homes.
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