This canal was dug by hand to deliver water from the Poudre River to the reservoir on the west side of the pump house. The reservoir provided the hydraulic force that drove the turbines and was also the source of the water  pressurized by the piston pumps and sent to Fort Collins. In 1883, water was delivered to the turbines by means of a wooden flume and penstock that descended outside of the west wall of the Pump Room and was directed to the two turbines through a pipe. The canal was leased to Larimer County Canal No. 2 Company in 1906 for 99 years, and the lease was renewed in 2005.