Coteau Creek Power Station began generating power in late 1968, although it wasn't officially commissioned until June 1969. The official opening was an event of more than usual significance because Coteau Creek was the final component in the massive South Saskatchewan River Development project.

disastrous drought of the 1930s crystallized support for a large-scale irrigation project for southern Saskatchewan. That support resulted in a federal-provincial agreement in 1958 to proceed with the project to dam the South Saskatchewan River. The construction of the Gardiner Dam and the creation of Diefenbaker Lake as a reservoir behind it gave SaskPower the opportunity to build the Coteau Creek Power Station.

full capacity, water flows through the station's three penstocks at 400 cubic metres per second. Coteau Creek has a net generating capacity of 186 megawatts.