Hydroelectric output depends on a large supply of water in a reservoir behind the dam. The reservoir is usually very large, so it can withstand a lot of evaporation before the production drops. But in a drought, the amount of water replenishing the reservoir from the river will also drop. If the drought is bad enough to significantly affect water levels in the reservoir, then the dam will produce less power, and areas that depend on the dam for electricity will need to get it from other sources as well.
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