Part of the Derwent scheme that comprises eleven hydroelectric power stations, the Butlers Gorge Power Station is the first station in the scheme. The power station is located aboveground at the foot of the concrete arched Clark Dam across the River Derwent that forms Lake King William.
Water from the lake is fed to the power station, coupled to one of two discharge regulating valves to ensure water flow to Tarraleah Power Station located further downstream.
The power station was commissioned in 1951 by the Hydro Electric Corporation (TAS) and officially opened on 22 November 1952. The station has one English Electric Francis turbine, with a generating capacity of 12.2 megawatts (16,400 hp) of electricity. The station building houses a single alternator and the turbine has a fully embedded spiral casing with water flow controlled via a butterfly type valve. It also houses a 125 kVA diesel generator for alternate station services supply when needed. The station output, estimated to be 684 gigawatt-hours (2,460 TJ) annually, is fed to TasNetworks' transmission grid via an 11 kV/110 kV three-phase English Electric generator transformer to the outdoor switchyard.
The water discharged from the Butlers Gorge Power Station flows via three conduits to either Nieterana mini-hydro, Tarraleah Power Station, or to Wally's Weir and back into the Derwent.