CAMBRIDGE, Mass.--To modernize a 1940s power plant for better efficiency, its owner turned to an underground steam pipe system designed in the 19th century.

Operators of the Kendall Station power plant here are planning to construct a pipeline to ship excess steam from the plant to heat buildings in Boston and Cambridge. The pipeline, which will cross the river near the mouth of the Charles River, will add capacity to the existing underground district heating system and lighten the plant's environmental impact.

During a tour of the facility last week, the companies involved said they hope to get permitting this summer for the upgrade which will boost plant efficiency to more than 90 percent. The plant tour was organized for former Michigan governor Jennifer Granholm who was in Boston to discuss energy policies with area officials.

The Kendall Station is a combined heat and power system, which is one of the most efficient ways to use energy. By tapping into the district heating pipe network, the plant will be able to increase the amount of steam that gets used for heating, said executives from Veolia Energy, which operates 22 miles of the district heating system.

"No district heating network should be without a combined heat and power plant," said Bill DiCroce, the chief operating officer of Veiolia Energy North America, which operates a number of district heating grids. "Your district becomes a portal for a sustainable energy project."

Combined heat and power, or cogeneration, systems can come different sizes, even for individual homes, but the basic idea is the same. A fuel is burned to generate electricity and the heat from that process is used either for space heating or an industrial process that requires heat.

The Kendall Station burns natural gas to drive room-size turbines that generate up to 256 megawatts of electricity. The hot gases from those turbines are then directed to a "heat-recovery boiler" that makes steam. In this case, the steam is piped through a district heating loop.

Right now, some of that steam is piped to Boston and Cambridge to provide heating for the Massachusetts General Hospital and other commercial customers. Veolia's Energy plan is to build a second 20-inch pipeline to serve others, including universities and high-rise buildings, said DiCroce.

Rules an impasse Diverting all of its steam into the district heating system, which the company hopes to start doing by next winter, to increase efficiency will be the equivalent carbon reduction of taking 60,000 cars off the road while not producing other air pollutants, he said. In addition, it will mean that the plant will stop discharging hot water into the Charles River.

The plant, operated by GenOn Energy, now uses cold water from the river to condense most of the steam it produces. It then discharges that cooling water into the river at a higher temperature than it came in. Operators now monitor water temperature and the number of dead fish per day to gauge any detrimental effect on the ecosystem.

Because it's a very efficient use of energy, officials are supportive of the plan. But building an additional pipeline to connect to the district heating system is complicated because it involves, federal, state, and city officials and multiple agencies, said Jim Hunt, the chief of Environmental and Energy Services for the city of Boston. "Everybody wants to do this," he said.

Combined heat and power (CHP) systems are already routinely used for both power plants and industrial facilities. Nearby Massachusetts Institute of Technology, for example, has its own CHP system that it uses to power and heat its campus.

The efficiency improvement over separate power generation and heat is significant. A commercial facility can convert about half of fuel to useful energy, whereas a combined heat and power facility that makes use of waste can have efficiency of more than 80 percent, DiCroce said.

A number of cities in the U.S. have these underground district heating, but cogeneration coupled with a local distribution loop is far more developed in many European countries, DiCroce said.

One of the barriers to CHP is the higher cost of building a system with equipment that both generates electricity and makes use of waste heat. In the U.S., there are also regulatory barriers, DiCroce said. Combined heat and power technology doesn't always benefit from clean-energy incentives and utilities are reluctant to let other companies provide heat to their large customers. "You can't cross the street to serve customers. It becomes very challenging," he said.