The owner of four power plants in the Washington region agreed to reduce air-polluting emissions substantially in the next six years and to pay a $500,000 fine, according to a settlement announced yesterday by environmental and company officials.

Mirant Mid-Atlantic, which supplies energy to Pepco, filed for bankruptcy protection in July 2003 and has been criticized for pollutants spewing from its coal-fired plants. The settlement came a year after the Virginia Department of Environmental Quality issued a notice of violation against Mirant for allegedly exceeding emission limits established in the Clean Air Act at the company's Potomac River plant in Alexandria.

The settlement with state and federal agencies calls for Mirant to begin installing pollution-control technology this year that will reduce nitrogen oxide emissions by 65 percent -- or 29,000 tons a year -- by 2010 at its plants in Montgomery, Prince George's and Charles counties in Maryland and at its Alexandria plant, officials said. Nitrogen oxide contributes to acid rain and increases the low-level ozone that causes smog. These pollutants can lead to serious respiratory problems and aggravate childhood asthma, officials said.

"This agreement will have a substantial impact on the air quality in the entire Washington area," Maryland's secretary of the environment, Kendl P. Philbrick, said in a statement.

In addition to reducing pollutants, Mirant agreed to pay the civil penalty, which will be divided between Virginia and the federal government. A cost estimate for the nitrogen oxide improvements was not available yesterday from Mirant, an Atlanta-based firm.

Mirant spokesman Steve Arabia said the utility's financial problems will not prevent it from paying the penalty or complying with the pollution reduction measures. When Mirant filed for bankruptcy protection last year, it suspended its property tax payments to local jurisdictions in Maryland and Virginia. But the company said last month that it would pay a total of about $33 million for its 2004 taxes. The settlement must be approved by the federal bankruptcy court in Texas that is handling Mirant's case, officials said.

At the Potomac River Plant in Alexandria, Mirant will also spend about $1 million to reduce more than 47 tons a year of coal dust pollution, Arabia said. The Potomac plant and Charles County's Morgantown generating station will be the first to have the nitrogen oxide reduction technology installed, Arabia said.

Pollution-reduction plans at the other two Maryland plants -- the Chalk Point plant in Prince George's and the Dickerson plant in Montgomery -- have not been established, he said.

The company must make its air quality improvements at the local Mirant facilities, rather than by receiving emission credits for reducing pollution elsewhere. The settlement does not prescribe what technology the firm installs, Arabia said.

"This is a big deal for the region," he said. "This allows Mirant to significantly reduce emissions while providing the necessary flexibility for us to invest our capital in the most efficient manner."

In a settlement with Virginia and federal agencies, Mirant Mid-Atlantic has agreed to reduce air-polluting emissions at its plant in Alexandria, above, and three other plants in Maryland, as well as pay a fine of $500,000.