Ridgway Dam was built as part of the Dallas Creek Project.

The construction of the dam forced the re-routing of U.S. Highway 550 to the east and the abandonment of the Ridgway Branch of the Denver and Rio Grande Western Railroad.

In 2014, work was completed on retrofitting the dam to add a hydroelectric plant.

The electricity created is sold to the Tri-State Generation & Transmission Association and to the City of Aspen.

In an average year, the two generators produce about 24,000 megawatt hours of electric power.