The original dam and power plant was the idea of businessman Frank Reed. It was constructed by the Anchorage Light and Power Company between 1927 and 1929 atop a natural landslide dam in the Eklutna Valley. It regulated the river to the Lower Eklutna Dam which diverted water into the Old Eklutna Power Plant. The lake dam was rebuilt and improved in 1941 after the previous structure failed. During this same year, the population in Anchorage increased greatly with the onset of World War II. To cope with increasing power demand, the United States Bureau of Reclamation proposed the Eklutna Project. It included raising the dam and installing a new power plant opposite Goat Mountain to the north, along the Knik River. The United States Congress authorized the project on 31 July 1950. Construction began in 1951 and raising the dam commenced the following year. The first generator was commissioned on 8 January 1955, the second and last on 1 April 1955. On 1 July 1955 the entire project was complete. The Great Alaska earthquake in March 1964 caused significant damage to the dam, particularly the water intake for the power plant. The intake shifted towards the lake and frozen alluvium beneath and near the dam's spillway densified, creating voids. Later, in July of the same year, as the ground thawed, two cracks formed near the spillway and portions of the dam filled the void. The dam was deemed unsafe and rehabilitation was carried out until 1966. In 1997 the Alaska Power Authority sold the dam and power plant to Anchorage Municipal Light and Power, Chugach Electric Association and Matanuska Electric Association for US$6 million.