B.L. England power plant will dramatically reduce its release of air pollutants through a plan announced Thursday to convert its coal and oil units to natural gas over the next four years.

One of the Cape May County plant's coal-fired units will stop operating by the end of September 2013, and two other units powered by coal and oil must be converted to natural gas by May 2016.

Officials had confirmed plans of the conversion in April, but Thursday’s announcement detailed the agreement between plant owner RC Cape May Holdings and the state Department of Environmental Protection.

The 49-year-old facility along the Great Egg Harbor Bay in Beesley's Point is one of the oldest power plants in the state and the last coal-fired operation without modern pollution control equipment.

Once converted to natural gas, emissions of nitrogen oxide and sulfur dioxide emissions, both of which are linked to respiratory problems and can cause smog and acid rain, will be almost entirely reduced.

"This agreement is a win for public health, the environment and the economy," said DEP Commissioner Bob Martin, in a statement. "Not only will it result in marked improvements to air quality in the region, it will keep the plant economically viable for many years to come."

Environmental advocates also hailed the announcement as a positive development for the health of nearby residents.

"This is good news for air quality," said Bill Wolfe,CQ director of Public Employees for Environmental Responsibility. "I don't think there's any dispute over that."

Wolfe did note that previous plans to reduce pollution from B.L. England had later been amended to extend deadlines for compliance, and this latest agreement does that again.

Jeff Tittel, director of the New Jersey Sierra Club, also said these changes should have occurred sooner.

"Cleaning up this plant is a good thing, however B.L. England will still be allowed to pollute for the next four year without fines or penalties," Tittel said in a statement. "While B.L. England is given more time and leniency the people of South Jersey will be paying the price with polluted air."

The new agreement allows for the company to request extending the deadlines again by the end of next year. If the company does not comply with emission standards and aspects of previous agreements, though, it will owe anywhere from thousands to millions of dollars in penalties.

The plant was built in 1963 and named after Bayard Lanning "Pat" England, a former president and chairman of Atlantic Electric.

Atlantic Electric, Conectiv and Pepco Holdings Co. formerly owned the plant, and the first administrative consent order stems from an alleged violation of the federal Clean Air Act in 2006. The state said they did not make required pollution-control upgrades when they implemented other significant upgrades.

RC Cape May Holdings, a subsidiary of Rockland Capital Energy Investments, acquired the plant in 2007, and had to continue meeting the requirements of those previous agreements.

"This transformative solution provides the best alignment with the overall objectives of all stakeholders, and we're committed to seeing it through," said Jim Maiz, senior vice president for RC Cape May Holdings, in a statement.

The plant employs about 75 people, and Upper Township Mayor Richard Palombo said he expects the conversion work to create more jobs in the region.

"It sounds like a very exciting project," Palombo said. "It sounds like it can boost the economy of our region a little bit because of jobs that can be provided."

Senator Jeff Van Drew, D-Cape May, Cumberland, Atlantic, also issued a statement praising the news and mentioning the economic impact of keeping the plant open.

"One of the oldest power plants in New Jersey, B.L. England is a major employer in our area," he said. "Closing the plant down, which had been discussed as an alternative, would have been a big mistake."

Palombo said that RC Cape May Holdings officials have said the project could cost around $200 million and that it will require running a natural gas pipeline from the facility into Cumberland County.

A call to Rockland Capital’s office in Houston on Thursday morning was not immediately returned.

The plant currently has a production capacity of about 450 megawatts, but through efficiencies using natural gas, its capacity could increase to as much as 570 megawatts, even though it rarely runs at peak capacity.

After the shutdown of one of the coal units next year, the second coal unit must be shut down by May 2015 in order to be converted. The third unit burns oil and only operates during peak demand periods, and it too will be converted to natural gas.

In addition to those requirements, the plant must preserve 150 acres of existing wetlands around its property. It is already in the process of converting an abandoned golf course into a natural area with a 4-megawatt solar energy facility.