In 1825, the Canal Commissioners advertised for bidders for the use for the surplus waters of Clinton’s Ditch. The winning bid was a sum of $200 per year and was awarded to Junius Hatch and William Kennedy in January 1826.

The entrepreneurs of the day quickly realized the water could be utilized for power with a 60’ drop. A race for water was constructed on the north side of the canal being above ground to supply mills with water.

In 1839 at the request of Lyman Spalding and other mill owners the NY State Legislature authorized the (then owners of the mills) to construct a tunnel on the north side of the canal to supply water for power.

The Lockport Hydraulic Co., was incorporated in 1856.

The Kennedy/Hatch lease passed to William and Betsy (Kennedy) Daniels. In 1856, the Daniel’s conveyed the water rights land to the Lockport Hydraulic Company.

This lease included the control of the surplus waters and the race on both the north and south sides of the canal. The south race stretched from the Niagara level of the canal with an above ground race running underneath Market Street to Spring Street.

After the incorporation of the Holly Manufacturing Company, the mill owners wanted assurance that any investment made at considerable expense would be protected.

On March 25th 1858 the New York State Legislature enacted chapter 42 of the Laws of 1858 authorizing the Lockport Hydraulic Company to purchase and hold in fee simple real estate contiguous to the mill race belonging to said company and between said race or any mill race that said company may hereinafter construct and the Erie Canal, provided said company shall deem such real estate convenient and suitable for manufacturing purposes.

The Holly manufacturing company was the fist to use the tunnel for water power. A head of 56’ feet and a production of 240 horse power.

In 1872 the LHC conveyed to the City of Lockport to draw water from the tunnel.

In 1886 the Richmond Manufacturing was granted a water lease for the purpose of utilizing the tunnel for water power and the tunnel was expanded.

In November of 1891 the Jackson Lumber Company signed an agreement with LHC and Lockport Pulp to utilize water from the north tunnel which was extended again. On September 1, 1900 the LHC signed an agreement with Lockport Pulp for water from the North Tunnel until 1941.

The Hydraulic Race Company was incorporated in October 1907. In December of 1907 all assets of the LHC were morphed in the Hydraulic Race Company.

In 1946 HRC merged with Buffalo Niagara Electric Corporation and in 1950 the Buffalo Niagara Electric Corporation merged into Central New York Power Company to be named Niagara Mohawk Power Corporation.

In 1995 Niagara Mohawk sold the right, title and interest for the Hydraulic Race Co. to Lockport Hydraulic Race Co.