WHAT DO YOU DO when you have a power plant which, on the one hand, can provide low-cost, low-pollution energy for several hospitals, but on the other hand, might kill four people in 40 years?

That, in a nutshell, is what the Commonwealth's Department of Environmental Quality Engineering (DEQE) will be deciding sometime this month. Do you okay Harvard's Medical Area Total Energy Plant (MATEP), which has already cost the University $302 million--six times more than originally projected? Or do you decide that the risk of four people suffering lung cancer from nitrogen dioxide emissions is too great and therefore prevent the site from generating electricity? To put it more bluntly: are those hypothetical lives really worth $75 million apiece?

What makes the question all the more thorny is that it's not a profit-seeking utility seeking the license, but a consortium of hospitals, research centers and a medical school which serve 585,000 patients a year and consistently come up with awesome medical breakthroughs. Moreover, if MATEP is allowed to start up its six 9000-horsepower diesel engines, it can begin offering the seven hospitals and other clients electricity 30 to 35 percent more cheaply than Boston Edison.

MATEP currently produces steam and air conditioning for the hospitals and electricity for the Brigham and Women's Hospital. It has only one more hurdle to cross before starting up the diesels. On August 24, a hearing officer appointed to make a recommendation to the DEQE ruled that although nitrogen dioxide emission from MATEP could potentially cause as many as four lung cancer deaths over the plant's 40-year operating life, that's not an "unreasonable" risk. In fact, according to hearing officer Ellyn R. Weiss, a Washington, D.C., environmental lawyer who has handled the MATEP case since 1977, living under the plant's stack is no more dangerous than smoking 1.4 cigarettes a year for 20 years. The DEQE now has to review Weiss's report and comments from all parties, and is expected to make a final decision by the end of the month.

MATEP'S ENEMIES in Brookline and Mission Hill have used a variety of legal schemes to stalemate the plant since 1976. They have vivid interpretations of Weiss's recommendation. According to Brookline selectman Zvi Sesling, Weiss was saying that "Harvard can do something that nobody else can do--legally kill four people." According to Louis Horwitz, chairman of the seven-year-old Neighborhood Organizations Mobilized Against the Total Energy Plant (NOMATEP), "That's sick. I don't know of any country other than Nazi Germany that is able to put a price on human life." And according to Brookline lawyer Daniel G. Partan, "When stripped of its technicalities, the bold fact remains that we shouldn't let Harvard do what they want to do when four innocent souls will pay the price."

But consider these facts:

* The "four deaths" scenario refers to an educated guess, and the chances are just as likely that no one will die as that four people will die.

* 1.66 million people live in the area affected by MATEP, 771 of them every year die of lung cancer.

* MATEP will increase by 1 percent the amount of air pollution in the area.

* As a result of the seven-year legal nightmare, MATEP has been forced to install four elaborate air monitors in Boston and Brookline which report back to the Brookline Ave, plant. If at any time the NO, level were found to be over the state's limit, MATEP would shut down, cut over to Boston Edison power, and wait for the carcinogens to disperse.

* The plant MATEP replaces, the now-demolished Blackfan Street steam house, provided only steam and chilled water for air conditioning for the Medical Area. MATEP can churn out enough electricity to light up suburban Wellesley (population 28,000), air conditioning equal to 44,000 window-sized units, and all the needed steam--with only half the pollution--of the old facility.

As President Bok says of what may be the biggest headache of his 13-year tenure, "It certainly makes you wish that there were some way in this country, to get these things resolved more quickly. I don't mean just this plant, but the regulatory process in many ways has become so cumbersome [that] suddenly, before you know it, you're in a position where the cost and expense of the delay gets out of all proportion to the problems that are being addressed."

So it is with MATEP, Harvard has spent seven years fighting in the courts, testing and retesting the diesel engines, and installing an elaborate air monitoring system--all of which have driven the plant's price tag up 500 percent. Every day the diesels remain idle, the hospitals lose money because the plant is not realizing the energy savings that would make it worthwhile.

The choice before the DEQE is stark: it can knuckle under to the Luddite irrationality of the protesters, or it can recognize finally that MATEP has been scrutinized more than enough. Certainly MATEP poses some environmental risks, but they are much less severe than those from other plants. And given the extensive safeguards in place and the obvious value of low-cost, reliable energy for the hospitals, it's time for the state to approve the diesels.