Water is drawn from behind a dam above the Aniwhenua Falls and diverted through a canal and a headpond to the power station before being discharged back into the river.
The 1973–74 oil shock, nation-wide electricity shortages during the winters of 1973 and 1974, a renewed policy emphasis on regional development by central government, and increased uncertainty as to future wholesale electricity price trends lead to the New Zealand government to re-evaluate its policy regarding local hydro development.
[1] Taking up this opportunity the Bay of Plenty Electric Power Board which had begun operations in 1928 and engaged consultants to investigate a local hydro scheme in mid-1973.
The study determined that a power station on the Rangitaiki River at its confluence with the Pokairoa Stream, midway between Murupara and Whakatane.
The main identified environmental impacts were significantly reduced flows over the Aniwhenua Falls, inundation of productive farm land and the displacement of one family, as well as the long term accumulation of sediment in the lake that the project would create.
[4][1] As a result, the power board was forced in August 1994 to vest all of its assets including Aniwhenua and associated water rights to the Bay of Plenty Electricity Limited.
[4] As a result, in 1998 Bay of Plenty Electricity sold its retail and generation business, together with its name to Nova Energy, which was owned by the Todd Corporation.
At the beginning of December 2018 Pioneer Energy took over the services agreement with the Southern Generation Partnership to operate and maintain the power station.
[11] From the headpond two penstocks transport the water down to a powerhouse containing two Escher Wyss vertical Francis turbines which are each directly coupled to an ASEA 11 kV 12.5 MW synchronous generator.
[2] Compensation water of a 2.5 cumecs is also released from the dam to preserve the original river channel and maintain flow over the falls.
[12] A small turbine coupled to a 100 kW generator is driven by the compensation flow and supplies power to the local distribution network via Horizon Energy's Galatea feeder.
For transmission pricing purposes a Prudent Discount Agreement exists for Aniwhenua that makes it part of the Edgecumbe GXP.
The headwaters of the Rangitaki River collect lightweight pumice sands and partly greywacke gravels which are deposited in the lake.