The dam has a controlled spilway located in the middle part of the embankment. There are no additional outlet works. Gray Reef Dam serves as an afterbay type structure to temporarily impound water and to regulate river flow so that maximum power peaking capacity may be realized at Alcova Dam. During construction, the dam was referred to by the unofficial name of Alcova Afterbay Dam. Gray Reef Reservoir is small, with a capacity of 1,804 acre-feet.
All water passing from the dam is released through the controlled spillway.
The normal operation of the spillway gates is by remote control from Casper Control Center in Mills, Wyoming. Gray Reef Dam has no irrigation outlet works and there are no power generating facilities. Inflow to Gray Reef Reservoir consists of water released at Alcova Dam and Powerplant. The amount of water entering Gray Reef Reservoir from several small, intermittent drainages was considered negligible and was not considered in the inflow design flood study used to design the spillway capacity. Spillway capacity was designed to pass a maximum design flood of 20,000 cfs.