To accommodate its increasingly power-hungry infrastructure and defer a skyrocketing electricity bill, the University is planning to build a new electrical plant on the School of Medicine campus, administrators said this week.

Sterling Power Plant, which currently generates steam and chilled water, will be modified to generate electricity as well, if the plan is approved by the Yale Corporation. Administrators said increasing power needs and rising costs from outside suppliers have made the addition necessary, and they hope to obtain Corporation approval within the year. Perhaps surprisingly, the upgraded facility fits into the University’s plan to reduce greenhouse gas emissions over the next decade. Environmental activists said they were pleased with Yale’s commitment to improving emissions, but still had some concerns over air quality in the surrounding area.

Administrators said the project is currently in the planning stages, and they have received funds to design a cogeneration plant that will produce electricity, steam and chilled water, as the Central Power Plant next to Payne Whitney Gymnasium does now. That plant was modified to generate electricity about 10 years ago, Energy Manager Tom Downing said, and the University wanted to wait until the Central facility had been in operation for some time before continuing on with the Sterling plant, which is situated at 309 Congress Avenue. The Central Power Plant cost approximately $70 million to upgrade, but Downing said the Sterling improvements will be significantly less expensive.

The need for additional power is becoming more pressing, particularly on that part of campus, he said. A new building for the School of Medicine is being built on Amistad Street, and the Yale-New Haven Hospital Cancer Center is slated to open in 2009.

Currently, electrical power on the medical campus is purchased from United Illuminating, an electricity reseller. UI recently announced plans to raise its energy prices as much as 50 percent over last year, though the University has been protected from rate hikes due to its 10-year contract with UI. But that contract ends June 30, and UI spokeswoman Anita Steves said that under state law, UI can no longer negotiate special contracts with individual consumers instead of charging them the standard rate.

“We know for sure that our rates are going to go up,” Downing said.

Economics aside, the new plant would be a boon to the University, Downing said. Yale’s electricity generators produce 37 percent less emissions than the average power plant in New England does, and 56 percent less than the U.S. average, he said. The difference is the type of fuel burned — predominantly natural gas, which is less polluting than coal or oil. Low-sulfur oil is used as a back-up. Replacing electricity that is bought off the grid with Yale-produced energy will help reduce overall greenhouse gas emissions, and makes building the new addition the environmentally sound thing to do, Downing said.

Lynne Bonnett, chair of the New Haven Environmental Justice Network, said she was glad to hear that the new plant — which she had not heard of before — would use natural gas, which burns more cleanly. Still, she said, the air quality in the surrounding area is most likely already poor. Large power plants hurt the environment by releasing greenhouse gases, but also by releasing unfiltered particulate matter, which has a more local effect on air quality. Downing said it is not possible to know how the surrounding neighborhoods would be affected by the addition to Sterling Power Plant.

Overall emissions in the area will not necessarily go down if Yale no longer buys inefficiently produced electricity, Bonnett said, as the electricity those dirty plants generate will just be sold to someone else.

“The fact that they can generate their own power, reduce emissions and save money — I wish the rest of the city could do that,” she said.

Yale last increased its power generation capacity when it installed a fuel cell next to the Peabody Museum in 2003. The cell provides about a quarter of the Class of 1954 Environmental Sciences Center’s electrical needs with no harmful emissions.