Hydro station may be scrapped

Plans for a hydro power station on the Kaituna River could be scrapped, sparking fears millions could be lost from the local economy.

The Rotorua Chamber of Commerce understands the Department of Conservation's director general is expected to make a final decision on an internal recommendation not to allow the hydro scheme to go ahead.

The planned $40 million dollar project would see about half a hectare of DOC's 54ha Upper Kaituna scenic reserve lost to create a hydro scheme capable of supplying up to 15 per cent of Rotorua's power needs.

The department had approved the project in principle by regional general manager Barbara Browne. But it's understood that decision was reversed following concern about the scheme's impact on the reserve's scenic and botanical values.

DOC's director general Al Morrison is considering the recommendation and his decision is expected in a few weeks.

The project needs to be signed off by DOC as landowners before applicants - Bay of Plenty Energy (formerly Bay of Plenty Electricity) - can apply to the regional council for resource consent.

Yesterday DOC's media spokesman, Mark Davies, wouldn't confirm the internal recommendation was to reject the proposal.

However, he said the department was giving the application to build a dam and flood part of the scenic reserve "very careful consideration".

The earlier decision by Ms Browne to support the project was a step in the process to ensure public submissions could be considered. DOC was bound by requirements of the Conservation Act to consider whether the proposal would be "contrary to the purpose for which the scenic reserve was held".

That meant taking into account the impact the scheme would have on the Kaituna's landscape and the reserve's scenic and botanical values, Mr Davies said.

The proposal involves building a hydro power station, which would generate 13.5 megawatts of electricity, enough to power 10,000 homes, or 15 per cent of Rotorua's demand.

The 54ha reserve borders the western bank of the Kaituna River and is downstream from Okere Falls and the Trout Pool.

The power station would involve some permanent damage to the reserve, including flooding a 1.2km-long strip of vegetation to power the station. A further 2.5km of river would have its level reduced by as much as 2.6m downstream of the dam.

The scheme has drawn a number of critics, with several making formal submissions opposing the plans by March's deadline.

They included commercial kayaking operators with concerns also voiced by Fish and Game over the scheme's impact on fisheries.

Yesterday Rotorua Chamber of Commerce chief executive Roger Gordon said scrapping the project meant Rotorua would lose millions in lost business opportunities.

Casualties would include local engineering and construction firms. Latest Transpower figures show at peak times the region has to bring in over half the power it uses and, with demand set to rise 25 per cent in the next 10 years, local generation options are vital.

"We need local generation opportunities if we are to provide the secure energy supply that Rotorua needs to grow - we believe Kaituna offers that," Mr Gordon said.