The Clutha District Council is reserving the right to formally review a proposal by Contact Energy to build up to two dams in its patch of the Clutha River.
Councillors recently agreed the council should remain neutral for now and wait for further details of the proposal before it decides whether it should take a stance.
Contact is revisiting old plans to build up to four dams on the river - Queensberry, Luggate, Beaumont and Tuapeka Mouth - and hopes to announce its preferred option early next year.
Council planning and environment manager Murray Brass asked the regulatory services committee to consider what stance, if any, the council should take, given the "substantial public interest" in the matter.
"In doing so, council should be aware that there will be district residents and ratepayers who stand to be seriously impacted by hydro development, while others could significantly benefit.
There may also be major effects on council's own infrastructure, especially roading," he said.
The council may be involved in the resource consent process if Contact pushes ahead with dams at either Beaumont and/or Tuapeka Mouth.
Mr Brass said the council had three options - to stay neutral throughout the process, take a stance or remain neutral until the proposals are further developed.
The committee chose the last option.
Mr Brass said the council, by taking this approach, could adopt a "wait-and-see" attitude to the proposals.
