Well you read it right. Update your current Nokia Software Recovery Tool to 1.5.0 and use this to recover your phone even if your phone is on!
Here is the article from WPCentral:
Nokia Software Recovery Tool has just been updated. Try and open the application today and you'll be prompted to update to version 1.5.0. This update is notable for introducing a localized installer that detects your Windows language automatically.
Nokia Software Recovery Tool is a handy desktop application to have around if you have a Lumia. We've used it in the past to downgrade your OS from Windows Phone 8.1 to Windows Phone 8. You can also use the software to recover a handset that isn't starting up.
Here's the full changelog for version 1.5.0 of Nokia Software Recovery Tool:
New localized installer that detects your Windows language automatically
Support for latest products
Some bug fixes and layout improvements
Be to sure to download and install Nokia Software Recovery Tool. You never know when you might need to use it.