Fifty feet below the platform of the Powell Street BART Station sits the starting point for one of the largest water recycling projects in San Francisco — one that’s transforming dirty groundwater into clean steam heat for hundreds of downtown buildings. In the process, it’s saving tens of millions of gallons of drinking water annually.

For decades, BART officials treated the naturally percolating groundwater that pools beneath the BART stop as a nuisance and a potential flooding risk. After seeping into an underground cistern, millions of gallons of water a month was pumped into the city’s sewer system.

But just across Market Street from the station, one of the largest water users in the city, Clearway Energy, saw a precious resource going to waste and an opportunity to reduce its substantial water bill.

Clearway operates Energy Center San Francisco on Jessie Street behind the Old Mint Building. The center provides steam heat to about 180 downtown buildings. Historically, that meant vaporizing vast quantities of potable water and sending pressurized steam through about 10 miles of pipes. It isn’t a cheap endeavor. Last year, the company’s water bill was around $2.2 million, said Gordon Judd, the energy center’s general manager.

Company officials realized that if they could collect and clean the water draining beneath the train station, they could significantly scale back Clearway’s use of drinking water.

“We thought, ‘Isn’t there a way to tap that (groundwater) and use it for something useful?’” Judd said.

With the help of a $500,000 grant from the San Francisco Public Utilities Commission, the company installed a 1,000-foot pipeline and replaced aging sump pumps to transport the groundwater to its Jessie Street plant, instead of into the sewer system. The company also invested around $3 million into a water-treatment system needed to scrub the brackish water of minerals and large debris that would otherwise build up in the company’s pipes.

“When you’re taking a train, whatever you see down on the tracks, that’s what ends up here,” Judd said. Needles, beer bottles and other unsavory debris routinely end up in the energy center’s holding tanks. But, Judd added, the water has to be made cleaner than drinking water before it gets boiled into steam.

The energy center started processing the recycled water this year and is on track to save around 30 million gallons of drinking water annually. That’s enough to supply 2,000 San Franciscans with water for a year. The SFPUC estimates that each person in the city uses about 42 gallons of water per day.

“This is a tremendous opportunity to save water,” said Paula Kehoe, director of SFPUC’s director of water resources. “It was traditionally viewed as waste, but it’s actually a resource.”

Through its grant program and other initiatives, the agency is looking to encourage water conservation — particularly practices that don’t require the water to be transported long distances to be recycled.

“Having the water source close to where you’re going to actually use the water really makes for an ideal project,” Kehoe said.

A similar on-site water-recycling program got under way this year at the Moscone Center, where rainwater, foundation drainage and other water sources are being cleaned and reused to flush toilets and water trees and for street cleaning in the nearby Yerba Buena neighborhood. The project is expected to conserve around 15 million gallons of drinking water annually.

Over time, climate change is expected to produce more extreme meteorological swings, including intense rainstorms that will strain San Francisco’s aging sewer system, as well as droughts that will put an increasing emphasis on water conservation.

“In San Francisco, and throughout California, we need to continue to prepare for the effects of climate change by being more resourceful when it comes to our water supply,” Mayor London Breed said in a statement. “We are committed to environmental sustainability and protecting our scarce natural resources, and this innovative and groundbreaking project will help us conserve millions of gallons of clean drinking water.”

Dominic Fracassa is a San Francisco Chronicle staff writer. Email: dfracassa@sfchronicle.com Twitter: @dominicfracassa