The Deep Creek Station hydroelectric project was placed in service in 1925 by a predecessor company of Pennsylvania Electric Company (Penelec). In 1968, the Federal Energy Regulatory Commission (FERC) issued Penelec a license for the project (FERC Project No. 2370). Since its construction, the lake has evolved as the centerpiece of tourism in western Maryland. Discharges from the project enter Maryland's only designated 'wild' river, the Youghiogheny, which supports a reknowned trout fishery and one of the most challenging kayaking and rafting runs in the country. In 1988, Penelec initiated renewal of Deep Creek Station's license with FERC. As the coordinating agency for the state, the Power Plant Research Program (PPRP) within the Maryland Department of Natural Resource was involved at the outset of the relicensing and consulting process. PPRP identified issues of concern and conducted necessary environmental studies in close cooperation with Penelec. The relicensing process presented an opportunity to develop and implement a plan for controlling the timing and quantity of water released from the project to satisfy two objectives: 1) providing a reliable source of electricity, and 2) enhancing lake and river natural and recreational resources. Because the interests of various users of Deep Creek Lake's resources are often conflicting, this plan required finding balanced solutions to a variety of technically complex problems.

In late 1991, the Deep Creek Project was released by Federal Energy Regulatory Commission (FERC) from federal jurisdiction (effective in 1994) and is now operating with a State of Maryland surface water appropriations permit administered by the Department of the Environment. Power Plant Research Program has continued its involvement, providing technical expertise to produce an equitable plan for water and resource management at the project, currently owned by Brookfield Renewable Energy Partners, L.P. The permit issued in 1994 and renewed in 2011 includes conditions to balance the following suite of  resource and recreational concerns: 1) reservoir operations to make lake-based recreational opportunities more dependable and extend further into autumn, and to protect lake fisheries, 2) operation of the project to increase the number and dependability of whitewater boating opportunities, 3) mitigation of a long-standing DO problem in project discharges, 4) maintenance of a continuous minimum flow in the river to increase trout habitat, and 5) timing of generation during summer to maintain coldwater habitat for trout on a year-round basis.