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 Butlers Gorge Power Station, coupled to one of two discharge regulating valves to ensure water flow to Tarraleah Power Station located further downstream.

The Nieterana Power Station takes advantage of the energy potential from water dissipating from the Butlers Gorge Power Station into Tarraleah No.

[2][3] The power station was commissioned in 2004 by Hydro Tasmania and the station has one horizontal Boving Fouress Bangalore Francis turbine, with a generating capacity of 2.2 megawatts (3,000 hp) of electricity.

The station output is fed to TasNetworks' transmission grid via an existing 11 kV/110 kV three-phase English Electric generator transformer to the outdoor switchyard.