The Harvard Corporation on December 20 approved alterations in plans for the Medical School power plant now under construction, increasing the projected cost of the plant from $56 million to $80 million, Hale Champion, vice president for financial affairs, said yesterday.

The changes will increase the output of electricity and improve environmental safeguards, Champion said. He added that the eleven Medical Area institutions--hospitals, research centers, and Harvard schools--found the changes necessary after re-evaluating their future energy needs.

Champion said the projected cost increase can be misleading because the new estimate may include different cost components than previous estimates. Some only included construction costs while others included engineering expenses and the cost of land, he said.

Harvard, which he said will use approximately 20 per cent of the plant's energy output, will save an estimated $1.8 million annually, he said.

Although Harvard's credit rating enabled the institutions to get funding for the plant, the University will not shoulder the entire financial burden for the plant's construction and funding. Champion said.

"It's a joint enterprise. Each [medical facility] will pay according to the amount of utilities they take," he said.

An existing, "nearly obsolete" plant now produces steam for heat and chilled water for air conditioning. Champion said. The new plant will use a process to produce electricity as well, a procedure which is 30 per cent cheaper and more efficient than producing steam and electricity separately, he said.

The Environmental Protection Agency (EPA) has given the University a temporary permit for construction and will hold hearings this winter before issuing a permanent occupancy permit.

At the present time, the EPA seems satisfied that the construction project uses "the best possible technology" to reduce noise and pollution, Champion said.

Residents of the Mission Hill area, where the plant is being built, will have an opportunity to oppose the construction at the EPA hearings, but Champion said there is currently "not too much" opposition in the neighborhood.

Several years ago, when the plant was first proposed, many residents opposed it. However, subsequent improvements in the plans, combined with Harvard's help in obtaining a $40 million mortgage for a Roxbury Tenants of Harvard housing project in 1975, reduced the conflict.

Daniel Steiner '54, general counsel to the University, said yesterday he foresees no further legal or community problems related to the construction of the facilities.

The Corporation has also approved the creation of a third pooled income fund as an additional part of a University fundraising program which allows contributors to Harvard to receive interest on their gifts, Chase N. Peterson '52, vice president for alumni affairs and development, said yesterday.

The new fund, known as the Harvard Growth Fund, will yield an estimated 2.5 to 3 per cent annual interest to the donor or a named beneficiary, he said.

Two existing funds which operate in a similar fashion, the John Harvard Fund, yielding approximately 8 per cent annual interest, and the Veritas fund, paying approximately 5 to 6 per cent annually, had their names changed to the Income Fund and the Balance Fund respectively, he said.

The new fund emphasizes steady long range growth rather than higher short term income, he said