In 1759 Daniel Joncairs was the first to harness the power of the Falls when he built a canal above the Falls to power his sawmill. It was obvious that the Falls would be an incredible source of energy. In 1805, 2 brothers,Augustus and Peter Porter bought this area and all of American Falls from New York state government They then enlarged the original canal to provide hydraulic power for their tannery and gristmill. The Niagara Falls Hydraulic Power and Mining Company was chartered in 1853, they eventually constructed the canals which would be used to generate electricity. In 1881, Jacob Schoellkopf led the quest and enough power was produced to send direct current to illuminate both the Falls themselves and the Niagara Falls village.
Nikola Tesla and George Westinghouse built the first hydro-electric power plant in Niagara Falls and started the electrification of the world. The Niagara Falls Power Plant was the first hydro-electric power plant in the world. This was the final victory of Tesla's Alternating Current over Edison's Direct Current. In 1883, George Westinghouse was hired by the Niagara Falls Power Company, a descendant of Schoellkopf's company, to design a system to generate alternating current. With backing from some of the wealthiest men in the area, like J.P. Morgan, John Jacob Astor IV, and the Vanderbilts, they had built huge underground conduits leading to turbines generating upwards of 100,000 horsepower (75 MW), and were sending power as far as Buffalo, twenty miles (32 km) away.
Private companies on the Canadian side also began to harness the energy of the Falls, they employed both Canadian and American firms in their efforts. in 1906 the Government of Ontario eventually brought power transmission operations under public control, distributing Niagara's energy to various parts of that province. Currently between 50% and 75% of the Niagara River's flow is diverted by four large tunnels that arise far upstream from the waterfalls. The water then passes through hydroelectric turbines that supply power to nearby areas of Canada and the United States before being returned to the river some distance past the Falls.
There are three powerful hydroelectric stations on the Niagara River nowadays are Sir Adam Beck 1 and 2 on the Canadian side, and the Robert Moses Niagara Power Plant and the Lewiston Pump Generating Plant on the American side. The three, together, can produce about 4.4 GW of power.
The Ontario Power Generation is currently building a new 10.4 km tunnel to get water from further up the Niagara River. It is scheduled to be completed in 2009, and will increase Sir Adam Beck's yearly output by about 1.6 TW_h.