PPL Montana has agreed to install an estimated $10 million in new pollution controls at a Billings power plant if the company reverses its plan to close the facility.
The company also agreed to a $250,000 penalty for past pollution violations.
State officials said Monday the legal settlement would reduce future pollution from the 154-megawatt Corette coal plant if it remains operational.
The new equipment would have to be in place after April 2015.
Last year, PPL said it would mothball Corette by that date, citing environmental regulations.
The announcement came at the height of the 2012 campaign and was seized on by Republicans, who blamed Democrats for the loss of Corette's jobs.
PPL spokesman Dave Hoffman says the company still intends to mothball the plant, but it could re-open.