Allegheny Energy, owner of the Hatfield's Ferry coal-fired power plant, one of the state's biggest long-standing air pollution sources, will install emissions controls to settle a federal lawsuit brought by Citizens for Pennsylvania's Future.

In its announcement of the settlement agreement yesterday, the environmental group, also known as PennFuture, said the reductions in soot and sulfur dioxide pollution at the Greene County power plant will mean 200 fewer premature deaths and savings of $1.2 billion in health care costs annually.

"I am absolutely thrilled that this is the last summer when I have to keep my grandchildren inside to protect their lungs from this dangerous soot," said Charlotte O'Rourke, of Masontown, which is west and downwind of the power plant. Ms. O'Rourke was a plaintiff in the case.

"Before the lawsuit this plant polluted the air with soot six out of seven days, making life unbearable," she said.

The lawsuit, filed in February 2005 in U.S. District Court in Pittsburgh, detailed a long history of air pollution complaints and years of emissions violations at the 36-year-old plant, the second largest of Allegheny Energy's 23 electricity generating operations. The company's own records show thousands of smoke and soot violations on 1,635 days from the beginning of 1999 through 2003.

Allegheny Energy said it will spend $550 million to install the emissions controls on its three generating units at the 1,710-megawatt plant by 2009.

When completed, the changes will reduce sulfur dioxide emissions by approximately 95 percent, or 145,000 tons a year, and soot emissions by up to 2,000 tons a year. The controls, whose installation will create 350 jobs, will also reduce mercury emissions by an unspecified amount.

The U.S. Environmental Protection Agency estimates fine particle pollution from power plant soot and gases that form particles contributes to more than 20,000 premature deaths a year in the United States, primarily from heart disease, as well as nearly 300,000 asthma attacks and 2 million lost workdays due to respiratory ailments.

The agency estimates that every ton of sulfur dioxide from power plants adds $7,300 a year to public health costs and each ton of soot boosts health costs by $100,000 annually.

"This agreement will not only improve the health of local families, it will also make the area much more attractive to new residents and industries," said Charles McPhedren, senior attorney for PennFuture, which was joined in the lawsuit by the Environmental Integrity Project, a national environmental group.

Allegheny Energy's announcement on its pollution control projects did not mention the lawsuit or the settlement or any reductions in fly ash soot emissions mandated by the settlement.

Instead, it couched the environmental improvements at Hatfield's Ferry in a wider initiative that also includes plans to install pollution controls at its Fort Martin power plant in Maidsville, W.Va., and its Pleasants Power Station in Willow Island, W.Va.

"The scrubber installation resulted in the settlement," said David Neurohr, a spokesman for Greensburg-based Allegheny Energy. "The environmental controls are not being driven by the lawsuit."

Mr. McPhedren doesn't care how the environmental improvements are characterized.

"It doesn't matter why the company is taking this action. It's good for the environment, good for the neighbors and will create jobs," he said. "Installing the scrubbers is a knockout punch for the problems we alleged."