Sludge management has been regarded as an environmental challenge to deal with due to high energy costs for wastewater treatment plants. From this perspective, energy costs of sludge management should be defined and calculated in order to obtain an effective energy management in wastewater treatment plants. Energy consumption of sludge management is the major constituent of the operational costs. Especially, dewatering processes have led to high electricity consumption at industrial wastewater treatment plants. This paper aimed to define the role of design and operational parameters on energy costs of sludge treatment process in terms of total organic carbon (TOC) and sludge volume index (SVI) considering water energy nexus. Dissolved Air Flotation (DAF) sludge and centrifuge decanter were used for sludge dewatering process in a dairy wastewater treatment plant. Lime is used for sludge stabilization. Energy cost index has been figured out using a new derived numerical method. This study proposed a new developed methodology for energy cost assessment of sludge management. This paper revealed that energy costs would be lower if the wastewater treatment plant was operated under design conditions. If the plant was operated at design conditions, nearly 63% of reduction on energy costs of sludge handling process could be ensured. It has been recommended this plant could be operated under design conditions.