Carter Lake is the second largest reservoir in northeastern Colorado. It is the principal storage site for Colorado-Big Thompson Project deliveries to the south and east. Construction of Carter Lake began in 1950, stores over 110,000 ac-feet of water and is 180 deep at its maximum.

Northern Water is currently planning a hydroelectric facility at the outlet to the reservoir. A Lease of Power Privilege contract will be executed with the Bureau of Reclamation for this nonfederal hydropower facility. The Poudre Valley REA approved a power purchase contract in November 2010.  The Colorado Water and Power Development Authority approved a loan for the project in December 2010.

The turbines will be supplied by the British manufacturer Gilkes.  The hydroplant will have a capacity of 2.7 megawatts.