The many glacier-fed streams and rivers of the North Cascades have always been recognized as an important resource. The rivers provided the earliest pathways into the mountains, though these tumultuous waters have also hindered travel at times. The Davis family at their homestead at Cedar Bar constructed the first power plant on the Skagit River in the 1920s. Their small water wheel was powered by the nearby waters of Stetattle Creek. Similar Pelton wheels were used to produce electric power along Thunder Creek and the Stehekin River. Many homes in Stehekin eventually had their own pelton wheels until the power plant on Company Creek was built in 1960. It still generates power today using a pelton wheel along with diesel generators.
Between 1925 and 1926, the waters of Lake Chelan were raised 21 feet by a hydroelectric dam which was built down in Chelan. The additional water would have flooded many buildings like the Field Hotel so they were dismantled or moved. Construction of major hydroelectric development of the Skagit River began in 1918, when Seattle City Light was issued permits to begin construction of three dams along the river. Seattle City Light eventually built a railroad up the Skagit Valley to its company towns of Newhalem and Diablo. A diversionary dam at Gorge Creek was completed in 1924, and Diablo Dam - at that time the highest dam in the world - in 1930. Ross Dam, dedicated in 1940, was raised in 1949 to 540 feet, making it the highest of the three dams providing power to the city of Seattle. Visible from State Route 20 between Newhalem and Diablo, the present Gorge Dam was completed in 1961.