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TMWA to Seek Bids on Farad Hydroelectric Plant Property

By Carla O'Day

Truckee Meadows Water Authority (TMWA) board members agreed Wednesday to accept bids from developers for the defunct Farad Hydroelectric Plant property that it will soon acquire through a settlement.

TMWA plans to put out a “request for proposals” to see what type of replies from developers come in. Although TMWA owns the land, development guidelines would fall under those of Nevada County, Calif.

The plant was built alongside the Truckee River in 1899. It was the first electric generating plant on the eastern slope of the Sierra Nevada. Mining interests bankrolled the project so water could be pumped out of the Virginia City silver mines as the mine shafts were sunk deeper into the ground.

“It’s in a great location for river rafting,” said Pat Nielson, TMWA manager of distribution maintenance and generation. “Inside the area, there’s a flat area that would accommodate parking.”

The Farad Hydroelectric Plant, and a recently-constructed footbridge that's part of the Tahoe-Pyramid Bikeway.

The Farad Hydroelectric Plant, and a recently-constructed footbridge that’s part of the Tahoe-Pyramid Bikeway. Photo: Tahoe Pyramid Bikeway

Washoe County Commissioner Vaughn Hartung said a fishing village would be nice.

“I wouldn’t want to restrict potential uses,” Hartung said. “Let’s see what the appetite is.”

TMWA has determined that keeping the property doesn’t make financial sense.


  • TMWA purchased the hydroelectric facility and some of its assets, according to an agreement in January 2001 between TMWA and Sierra Pacific Power Co., known today as NV Energy. As a result of damages from a 1997 flood, the Farad facility wasn’t operational then and Sierra Pacific was involved in litigation with insurance companies over coverage disputes. Because of this, the purchase agreement provided for a post-closing delivery of the facility.
  • Insurance litigation delayed delivery of the Farad facility but TMWA and Sierra Pacific entered into a settlement agreement in June 2014. The agreement stated Sierra Pacific would assign TMWA 100 percent of all future insurance proceeds related to Farad and all claims for interest due for delayed payment. This includes payments under actual cash value coverage, replacement coverage, and destruction and increased cost of construction policies. The exact amount of insurance proceeds remain subject to litigation between Sierra Pacific and insurance underwriters.
  • In January 2017, the Second Judicial Court entered an order affirming $12.2 million of actual cash value plus interest and said Sierra Pacific is entitled to replacement cost coverage for reconstruction of the Farad facility. Therefore, Sierra Pacific can seek reimbursement for invoiced construction costs in excess of actual cash value coverage up to policy sub-limits of $62 million.
  • The court order also says that Sierra Pacific and TMWA may only recover replacement costs from insurers if electing for replacement coverage by April 2017. If so, reconstruction of the dam must take place within three years of the conclusion of the litigation. Assuming no further post-judgement proceedings on the interest payment occur, the deadline will expire Jan. 18, 2020. Since the deadline applies only to replacement coverage, nothing prevents TMWA from reconstructing the Farad facility at a later date.
  • Sierra Pacific timely elected replacement coverage pursuant to the settlement agreement, which requires it to transfer the Farad facility to TMWA within 120 days after the insurer’s acceptance, granted July 17, 2017.


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