Dave,
The southern power arm of the C-BT project actually takes water from Lake Estes, via the Olympus Tunnel, and runs it south east to two reservoirs (Pinewood and Flatiron) and three power plants (Pole Hill, Flatiron, and Big Thompson).
Normally, we move C-BT water along that route. We pump water up to Carter Lake from Flatiron and the rest of the water we run through Flatiron Reservoir, into the Charles Hansen Feeder Canal, and on over to Horsetooth.
The Hansen Canal crosses the Big T canyon at the Dam Store. In fact, that big pipe across the Canyon is our Big T Siphon (inverted siphon). The water in the siphon is bound for Horsetooth. The concrete chute delivers some canal water back to the river, and the rest of the water can run down to the Big Thompson power plant there next to the Dam Store and generate one last burst of electricity.
The power plant you're thinking of near Drake is the City of Loveland's. They divert at their dam at Idlewild and run the water down to their power plant at
Viestenz-Smith Mountain Park.
So, to answer your questions: the southern power arm of the project takes water out of Lake Estes. None of our power plants are in the canyon--although the Big T is at the canyon mouth, it is fed water from the canal above. Most of the tunnels and penstocks that move the water are underground, with the exception of the Flatiron penstocks which run water from Bald Mountain (just below Pinewood Res) down to the Flatiron Plant. You can see them from I-25 most days (they tend to glint in the sun). They can carry up to 550 cfs of water and they drop about 1118 feet to feed two main units in the plant.
And that's a quick summary of the Colorado-Big Thompson project here on the East Slope!
Best,
Kara