One of the more remarkable aspects of the Lake of the Ozarks is that it was built entirely with private funds as a hydroelectric project. The same can be said for a another dam and lake project located just a few miles upstream from Lake of the Ozarks. It's not a secret, but very few people seem to know about the other site. It's called Tunnel Dam.
Tunnel Dam is on the Niangua River about seven miles above (south of) Ha Ha Tonka. The Niangua there makes a sharp horseshoe-shaped bend to the west. The loop is over four miles long, but the neck of the loop is a narrow ridge only a few hundred feet wide. The dam, located across the river at the upper end of the bend, creates 360-acre Lake Niangua. The quiet lake, lined with wooded hillsides and sprinkled with a few homes and docks, is remininscent of the Lake of the Ozarks in earlier days.
The site was chosen for a dam because engineers discovered a 500-foot long cave that extended through the ridge separating the upper and lower bends of the river. Around 1911 this tunnel cave was modified and enlarged so that water from the Niangua would flow through it. Hydroelectric engineers built a small powerhouse and dam at the upper end and utilized the tunnel as a spillway for outflow from the turbines.
The present powerhouse and dam arrangement dates to 1930 (making it older than Bagnell Dam), and is somewhat different than the original design. The powerhouse is now located at the lower end of the tunnel, and takes advantage of the 43-foot drop, or head, as the water surges down the tunnel and into its two turbines. Tunnel Dam is not a towering structure like Bagnell Dam. The dam itself is nothing more than a concrete spillway with an opening that leads into the tunnel.
Tunnel Dam is owned by Show-Me Power. Its original equipment provides 3 megawatts of electricity for area residents.