Lake Mahinerangi is down more than 4m on its average level, but there is no crisis, a TrustPower spokesman says.
"If the country gets normal rainfall from here on in, everything will be fine," TrustPower community relations manager Graeme Purches said.
The lake's level meant the Waipori dam was operating near the bottom end of its permitted range, he said.
"When the lake gets down, the generation gets down. But it is still making a worthwhile contribution to peak flow in Dunedin and the Otago area."
Figures on the lake's electricity output were unavailable, but "it was miles off" shutting down, he said.
Like other hydro lake dams, Waipori dam was generating only what it had to but "there was no crisis".
Mahinerangi was well under its average of 385m above sea level, and it was permitted to operate at its lowest level - between 378.5m and 380m for only 50 days a year.
The lake was at 380.7m yesterday, the same level as on the corresponding day in 2003 - the last dry period.
In 2003, the lake was at the lowest range from the middle of July to the beginning of August, and 2008 was shaping up as another dry year, Mr Purches said.
"But we won't allow it to fall below its permitted level."
The ideal situation going into winter would be full hydro lakes, but lakes across the South Island were experiencing low levels this year, he said.
