This study targets one of the major energy consumers in the U.S. It suggests a new mechanical system that can recover a portion of the energy in Wastewater Treatment Plants (WWTPs). The proposed system entails a hydro-turbine installed above the air diffuser in the aeration tank to extract the water-bubble current’s kinetic energy and converts it to electricity. Observing the optimum location of the turbine required multiple experiments where turbine height varies between 35% and 95% (water height percentages above the diffuser), while varying the airflow between 1.42 L/s (3 CFM) and 2.12 L/s (4.5 CFM) with a 0.24 L/s (0.5 CFM) increment. Additionally, three water heights of 38.1 cm (15″), 53.4 cm (21″), and 68.6 cm (27″) were considered to study the influence of the water height. It was noticed that the presence of the system has an adverse effect on the standard oxygen transfer efficiency (SOTE). Therefore, a small dual-blade propeller was installed right above the diffuser to directly mix the water in the bottom of the tank with the incoming air to enhance the SOTE. The results showed that the maximum reclaimed power was obtained where the hydro-turbine is installed at 65–80% above the diffuser. A reduction of up to 7.32% in SOTE was observed when the setup was placed inside the tank compared to the tank alone. The addition of the dual-blade propeller showed an increase in SOTE of 7.27% with a power loss of 6.21%, ensuring the aeration process was at its standards.