They say that three's a crowd. And when the trio includes Harvard, a state agency and boisterous community groups, it's more than a crowd--it's a fight.

The fight, this time, has been over the Medical Area Total Energy Plant (MATEP), a Harvard-financed $130 million project that threatens to become a $130 million white elephant.

This week, however, the elephant lumbered forward, when an official from the state Department of Environmental Quality Engineering (DEQE) suggested that MATEP be allowed to install the diesel engines it needs to produce energy. Way back in January 1978, another DEQE official said "no" to the diesels, and community groups--which fear the power plant may send clouds of noxious nitrogen dioxide into their homes--let out a resounding cheer.

While all looked good this week for MATEP on the surface, however, the DEQE official who will make the final decision on the plant just hemmed and hawed some more. But informed sources say some kind of decision may come wafting down from above within two weeks.