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Contact Energy has been given permission to raise the level of Lake Roxburgh by 60cm, providing enough power for an additional 1400 homes a year.
Contact applied to the Otago Regional Council to vary one of the conditions of its consents for operating the Roxburgh and Clyde dams by raising the maximum operating level of Lake Roxburgh to 132.6m from 132m.
The application was heard on October 13, by a panel made up of Cr Gretchen Robertson (chairwoman), Cr Stephen Woodhead and independent commissioner John Lumsden.
Its decision was made public yesterday and consent was given, subject to six conditions.
"The benefits of increased electrical generation from an existing hydro-electric scheme outweigh the minor effects that will arise from raising the maximum operating level of Lake Roxburgh," Cr Robertson said in the panel's written decision.
The adverse effects would either be minor, or could be mitigated.
The hearing was told Lake Roxburgh operated at a maximum operating level of 132.6m from 1956 to 1979.
The amount of electricity generated by the Roxburgh power station depends on the height of Lake Roxburgh.
Contact civil engineer Boyd Brinsdon said by increasing the headwater level at the Roxburgh dam, the power station would be able to generate more electricity energy from the same volume of water.
The lake level fluctuates depending on demand for electricity.
To increase the level of Lake Roxburgh, the outflow going out of the Roxburgh dam will be held back for a short time.
Fourteen submissions were received on the application, eight from groups or individuals opposed to the lake being raised, five in support and one neutral.
The Alexandra Flood Action Society was one of the groups in opposition and society spokesman Stan Randle gave evidence at the hearing that the group was worried about the impact that raising the lake would have on the Manuherikia River.
Although Contact must remove sediment from part of the river bed under its current consents, Mr Randle believed raising the lake level would push sediment further up the river to a place outside where the riverbed had to be lowered.
Other opponents were concerned about access to historic sites along the lakeside and also the proliferation of weeds.
Conditions imposed by the panel include one relating to changing the flood rules.
These ensured the discharge flow from dams matched naturally occurring flood flows.
When the flow reaches 700 cumecs, the lake level will be lowered to below 132m, by either releasing less water at Clyde or increasing the flow through the Roxburgh dam.
Other conditions relate to addressing any affects on amenity areas, protocols if historic artefacts are found, and requiring Contact to ensure any effect on the Lake Roxburgh walking track is mitigated.