Contact Clutha hydro project manager Neil Gillespie, of Cromwell, said the geotechnical investigation and drilling programme did not indicate Luggate was the preferred option.
"The purpose is to gain more information on the geological conditions there. Currently, we have much greater detail on ... conditions at the other three possible sites [Queensberry, Beaumont and Tuapeka Mouth] than we do at Luggate and we want to gain a comparable level of information for all four possible future options," he said.
In 2009, Contact dusted off decades-old plans for Clutha River hydro-electric schemes, deciding to revisit options for the four potential dams.
The company has spent the past two years investigating the options at the four potential sites and consulting communities, amid opposition from Clutha River protectionist groups.
Mr Gillespie said a drilling rig was scheduled to begin exploratory testing to a depth of up to 30m at a site about 2km below the Luggate Red Bridge.
Upper Clutha River Guardians president Tim Ryan, of Wanaka, questioned the need for further investigation at Luggate when Contact had resource consent to install hydro-electric turbine generators at Lake Hawea.
"It is of major concern to us. Why aren't we seeing anything being built at [Lake] Hawea? Why do they have to go and investigate an area where a dam would destroy the whole valley back to Albert Town?" he said.
Mr Gillespie said there was still no expected time-frame for work to begin on installing turbine generators at Contact's Lake Hawea storage gates that would be capable of providing 17MW of electricity.
"Detailed" design plans were "yet to be completed", which would provide an outline for when construction might start.
However, Mr Gillespie did not know when those design plans for the consented turbine generators might be completed.
Clutha Matau-Au River Parkway Group chairman Lewis Verduyn, of Wanaka, said the Luggate dam proposal, "like all of Contact's old plans for large dams on the Clutha, is too destructive, too backward-thinking and too problematic".
Drilling was being carried out at the site to see if there was suitable bedrock capable of supporting large-scale foundations.
"They are doing their homework to further investigate costs associated with building dams. If there is no bedrock there, they may not be able to proceed because it could prove too costly," he said.
He also questioned the need for a dam, which, at nearly 1km wide, would have a profile across the Upper Clutha Valley "larger than the Clyde dam" and yet would generate only 86MW.
Mr Gillespie had consulted the River Parkway Group about its "geotechnical investigations" but "nothing I have learned about [their options] has made me feel better about the project", Mr Verduyn said.
Contact has already carried out preliminary digging at the drilling site, which is near where the Luggate Creek enters the Clutha River at the popular scenic area known as the Devil's Nook.
Mr Gillespie said pits about 4m deep had been excavated to check ground conditions before the holes were refilled.
The drilling-rig crew was expected to begin work after Easter, putting down six drill holes to depths of 10m-30m, during a projected three-week operation.
An ensuing geotechnical report about the potential site would be considered and would enable a clearer picture of possible costs of building a dam, he said.
The four sites
Luggate: 25m-high embankment dam, located about 2km downstream of Luggate Red Bridge, creating 350ha lake extending 15km to near Albert Town.
Queensberry: 14m-high embankment dam to feed into either a 12km or 9.5km-long canal to down-river powerhouse, creating 240ha lake extending 9km up river to near Luggate.
Beaumont: 30m-high concrete gravity dam located about 2km from Beaumont township, creating 1100ha lake extending 29km upstream from dam.
Tuapeka Mouth: 50m-high concrete dam located about 2km upstream from Tuapeka Mouth, creating 3200ha lake extending 55km upstream to Millers Flat and flooding Beaumont township.
