The community-owned company, which owns and operates 13 hydro-electricity generation stations and two wind farms in Otago and Southland, has applied for resource consents for the venture.
The consent application was notified yesterday by the Central Otago District Council. Submissions close on April 2.
''This opportunity has been on our radar for two or three years and we've done quite a lot of work on it and consulted behind the scenes with all the key players and agencies,'' Pioneer chief executive Fraser Jonker said.
''It's a small project and, in the scheme of others around the country, it's a small scheme with an extremely small footprint.''
The run-of-the river scheme would include a low weir, up to 4m high, a power station and pipeline.
It would be connected to the Central Otago network and generate enough electricity annually for 3500 homes.
Most of the scheme structures would be on Earnscleugh Station land and on the river margin.
Mr Jonker said the ''homework'' done on the project showed it was financially viable and sustainable.
Securing the jobs of the existing Pioneer workforce was one of the benefits of the scheme.
''It'll make the business more efficient and so secure those positions, plus, this scheme is right on our doorstep.''
Pioneer already generates power from the river.
The current Fraser power scheme, which takes water about 5km downstream of the Fraser Dam, was constructed in the mid-1950s.
The dam was built during the Depression as seasonal storage for irrigation.
The company was spending about $3 million upgrading the ''lower'' Fraser scheme.
The two Fraser schemes would operate independently, Mr Jonker said.
In its consent application, Pioneer said the reach of the Fraser River affected by the development was not usually accessed by the public for recreational use.
The rugged nature of the gorge made access difficult.
Part of the site is classified as outstanding natural landscape in the district plan and the rest is deemed to be a significant amenity landscape.
The company has filed reports on the site's hydrology, ecology, water quality, landscape and heritage values.
In the application, it said the difficult-to-access high country meant the scale of the project would not ''dominate'' the views or landscape.
Adverse visual and amenity effects would be avoided or mitigated and the power scheme would be an asset to the community.
In 2013, after a seven-year wrangle, Pioneer's plans for a hydro-electric development on the Nevis River were sunk.
Then minister for the environment Amy Adams blocked the plans by changing the water conservation order on the Nevis to increase its protection and ban damming.
Mr Jonker said from Pioneer's talks with the various stakeholders involved in the upper Fraser project, he was hopeful this scheme would proceed.
''I think this is a different story altogether to what we experienced in the Nevis.''
It would be Pioneer's first new hydro scheme since the Kowhai hydro-electric power station on the Teviot River, 3.5km east of Roxburgh, began operating in 2010.
Construction is also under way on Pioneer's third wind power venture, the $16 million eight-turbine Flat Hill wind farm near Bluff.
• Pioneer was formed in 1999 after the electricity industry reforms, and evolved from the generation assets of the former Otago Central Electric Power Board.
It is wholly owned by the Central Lakes Trust and pays an annual dividend to the trust.
Upper Fraser scheme
• Pioneer Generation project.
• Run-of-the-river hydro-electric scheme.
• 13km west of Alexandra, 3km upstream of Fraser dam.
• Scheme would harness natural velocity through falls in the Fraser River.
• Low weir, with height of up to 4m, no effective storage.
• Expected to generate enough power annually for 3500 households.
• Estimated cost $15m-$20m.
• Consents sought from Central Otago District and Otago Regional Councils.
