COLUMBIA, S.C. — The S.C. Court of Appeals has sided with conservation groups in their push to increase the flow of water through Duke Energy’s Lake Wateree dam – an effort environmentalists say will protect rare fish by improving river quality downstream.

In a split ruling Wednesday, the appeals court reinstated a state decision that denies a new water quality permit Duke needs to continue operating the hydroelectric dam above the Wateree River.

Duke spokeswoman Erin Culbert said the power company was weighing its next move, which could include challenging the appeals court’s decision in the S.C. Supreme Court. Until all legal issues are resolved, Duke will continue operating the Lake Wateree dam as it has in the past.

“Duke Energy is disappointed,” Culbert said of the decision, which she noted was not unanimous. “We are evaluating our options for next steps.”

At issue is a years-long dispute between Duke and environmental groups over the amount of water the power company should release through the dam at Lake Wateree and into the river downstream. Duke has proposed increasing the flow, but conservation groups say that isn’t enough. They want more water released to help improve habitat in the Wateree River for the shortnose sturgeon, a federally listed endangered species. The Wateree River is between Camden and Congaree National Park east of Columbia.

“It would have been a crying shame for South Carolina and its people to lose the right to protect the water quality in this state,” said Frank Holleman, an attorney for the Southern Environmental Law Center, which is representing environmental groups.

The legal dispute heated up in 2009, when the S.C. Department of Health and Environmental Control board denied a water quality permit for Duke to operate the Lake Wateree dam. The board agreed with then-Attorney General Henry McMaster that Duke’s plan didn’t adequately protect water quality in the Wateree River.

Environmental groups backed DHEC, but Duke challenged the agency’s ruling. The power company won on a technicality in state administrative law court, which blocked the DHEC board decision.

With Wednesday’s decision, the appeals court has now sided with DHEC and environmental groups, including American Rivers and the S.C. Coastal Conservation League. The appeals court discounted the technicality in Wednesday’s ruling, sending the matter back to administrative court for a hearing on the merits of the case. Duke could either battle the case out in administrative court or appeal directly to the S.C. Supreme Court.

Duke, by law, will operate the dam under current rules until the matter is resolved in court. The Federal Energy Regulatory Commission will decide on a new license for the power company’s dams along the Catawba-Wateree river system.

It is expected that FERC will ultimately grant a license, but it can’t act without a decision on the water quality permit in South Carolina. The shortnose sturgeon is a prehistoric-looking fish whose numbers dwindled in many freshwater rivers after dams were built in the early 20th century to supply power to the Carolinas. Issues with shortnose sturgeon also are a stumbling block for Santee Cooper in its effort to relicense dams along lakes Marion and Moultrie.

Culbert said the dispute over the Lake Wateree dam is holding up the license for 13 dams on the Catawba-Wateree river system in North Carolina and South Carolina. The company’s plan will increase sturgeon habitat by more than 900 percent, she said. But Gerrit Jobsis, southeastern regional director for American Rivers, disputed that and said the issue could be easily resolved if Duke would settle the case.