The company, which has operations in Otago, released a statement to the Stock Exchange yesterday which, not unexpectedly, said the storage lakes had been as low as 49% and were now 55% of average for this time of the year.
As lake levels remained low, the electricity industry had started a nationwide power-savings campaign.
The company's hydroelectric generation had been affected by the nationwide drought, and wind generation had been variable.
In May, the output from the Tararua wind farm was half of average but had returned to the long-term average so far in June.
TrustPower anticipated that it would sometimes be required to make purchases from the spot market when the prices were high.
By the end of the first quarter, the company expected to have bought about 40GWh from the spot market.
"This outcome is within the range of expectation during a period of very low hydrology."
Looking ahead, TrustPower expected to be "reasonably balanced".
An improvement to more typical hydro inflows across the generation portfolio would offer opportunities for net sales to the spot market and potentially some recovery of the current lower earnings, the company said.
Forsyth Barr broker Peter Young said the key point was that the drought was a short-term issue and would not affect long-term value in a significant manner.
"In fact, there is an argument to suggest that the current dry spell and extreme prices will force the state-owned enterprises to raise retail prices more than normal and so long-term value could go up."
The $15 million to $20 million operating-profit shortfall related back to "average" conditions as opposed to a drop in the level of profit compared to the 2009 full-year forecast, he said.
Forsyth Barr was already forecasting a dry start to the year, although wholesale prices had ended up higher than expected.
The profit numbers would be trimmed as a result.
Mr Young estimated TrustPower had paid up to $10 million for power off the spot market.
"TrustPower view this as a conservative release and it may be able to claw back some of the losses if the wind blows and it rains in the right spots.
"That said, continued dry weather could see a worse result."
