It is therefore a net consumer of electricity; the laws of thermodynamics dictate that more power is used to pump the water up the mountain than is generated when it comes down.

However, the plant is still economical to operate because the upper reservoir is refilled at night, when the electrical generation system is running at low-cost baseline capacity.

This ability to store huge amounts of energy led its operator to call Taum Sauk "the biggest battery that we have".

[9] An unusual feature is the upper reservoir which is constructed on a flat surface, requiring a dam around the entire perimeter.

On December 14, 2005, a catastrophic failure in the upper reservoir dam put the plant out of operation until it was rebuilt, recertified, and reopened on April 21, 2010.

[11] The upper reservoir can hold about 1.5 billion US gallons (4,600 acre-feet; 5.7 million cubic metres) of water behind a wall nearly 100 feet (30 m) tall.

The nearby Proffit Mountain ended up being an excellent alternative thanks to its comparable elevation (1,720 feet (520 m), the 6th-highest point in Missouri), its close proximity to the East Fork of the Black River, and the reasonably short distance of 27 miles (43 km) to the existing power transmission grid.

Its pump-turbines were the largest ever produced at the time of construction, it had an unusually high head (the highest in the US at the time, far surpassing all previous US pumped storage projects), a large storage capacity (it has been described as "the first of the large capacity pumped-storage stations to begin operation in the United States"[15]), black start capability, and had the unique ability to be operated either remotely by remote human operators in off-site facilities located 90–120 miles away (at St. Louis or Osage Power Plant/Bagnell Dam) or even fully automatically with zero human intervention.

This led to the catastrophic failure of a triangular section of the reservoir wall and the release of 1 billion US gallons (3,800,000 m3) of water in 12 minutes.

The sudden release sent a 20-foot (6 m) crest of water northwest of the reservoir about 1.75 mi (3 km) down the ridge to the East Fork of the Black River inside the north upstream side of Johnson's Shut-Ins State Park.

The flood destroyed many of the structures in the park and forced the closing of the trail connecting it to Taum Sauk Mountain.

A memo from Richard Cooper, superintendent of hydroelectric plant, indicated that the reservoir had a "Niagara Falls" style overflow on September 27 at the same spot that was breached (caused by wave action related to winds from Hurricane Rita).

The superintendent of Johnson's Shut-Ins and Taum Sauk State Parks, Jerry Toops, his wife and three children were swept away when the wall of water obliterated their home.

One child was treated for severe burns which resulted from heat packs applied by rescue workers as treatment for hypothermia.

[29] The Missouri Public Service Commission (PSC) reopened its investigation and subsequently found the accident to be a failure of Ameren management, stating: ...the Commission can only conclude that the loss of the Taum Sauk plant was due to imprudence on the part of UE (Ameren's AmerenUE Subsidiary).

UE knew, or should have known, that operating with a freeboard of only one or two feet left no margin for error and required particularly accurate control of the UR water level.