A portion of its water (154,000 acre-feet (190,000,000 m3) per year, on average) is diverted southward through an aqueduct tunnel to a powerhouse in Potter Valley, where it drives a turbine capable of generating up to 9.4 MW of electric power.

The non-diverted flow continues down the Eel to its mouth at the Pacific Ocean near Fortuna.

[3] In 1905, the Snow Mountain Water and Power Company started building the Potter Valley Project.

Cape Horn Dam was completed in 1907 (118 years ago) (1907),[2] and the original project became operational in 1908.

Pacific Gas and Electric Company took over the project in 1930 and has owned the dam ever since.