Currently, a large amount of work is being done for the development of hydropower in Armenia. However, there is still a lot to be done to build new powerful plants and modernize the old ones. At the moment the Sevan-Hrazdan, Vorotan cascades and other HPPs are being operated, which provide a third of Armenia's electricity. From the point of view, it is also important to put the energy use of small water flows on the agenda. It is planned to build the Meghri and Shnogh HPPs, which will make it possible to improve the situation to some extent. The design and operation of hydroelectric power plants is of great importance for the development of Armenia's energy. It will provide an opportunity to improve the energy security of our country. The purpose of the work is to substantiate the need to build a hydroelectric power station on the Chknagh River near the city of Stepanavan in Lori Marz, RA. Methodology. The basic equations of hydraulics, as well as the basic laws of HPP design, were used in the research. Scientific novelty. It is justified that if we build a hydroelectric power station on Chknagh river, we can save 3460 tons of organic fuel per year and solve many environmental problems. Applicability. The proposal can be applied in the Lori region of the Republic of Armenia. It has been established that in case of building a hydroelectric power plant on the Chknagh River, we can save 3460 tons of organic fuel per year and improve the climatic conditions. We can produce 17.13 million kWh of electricity annually. The purchase period with investments is 10.4 years.