In 1908, the Deer Creek Powerhouse was the first-ever project undertaken by Pacific Gas & Electric (PG&E) after the utility's founding in Nevada City in 1905. Today, the powerhouse generates 5.7 megawatts.

The powerhouse is above Scotts Flat Reservoir has an elevation of 3,602 feet and is situated nearby to Scotts Flat Reservoir on South Deer Creek.

Water arrives to the powerhouse from the South Yuba Canal via the Deer Creek Forebay. About a mile up a hill east of the facility, the canal dumps water into the  small reservoir that provides water to generate hydroelectricity.

Related, the Cascade Canal System Diversion is supplied via natural Deer Creek and imported South Yuba Canal flows. Thirty-one downstream canals provide the main source of water for Nevada City, Cascade Shores, Alta Sierra and Chicago Park areas).