Of course hydro power can be done correctly, assuming the collaboration of all the stakeholders in the watershed and careful tradeoffs. How many dams were built with such an equitable process?
Given hydro power's well-documented negative impacts, and our arsenal of other truly renewable energy sources, damming new rivers should be a last resort. In the US at least there is a strong trend of dam removal - many ill-considered hydro projects are costly to maintain, an economic loss to society as a whole, and a detriment to the environment. Quite far from any feasible definition of "renewable resource".
Would it be possible for them to utilize hydro significantly without destroying their agricultural industry?
California also generates a really large amount of its power geothermally. We don't hear much about the many mature geothermal projects.