It is believed that the power sector, particularly hydroelectric power, contributes to a very high consumption of fresh water in terms of evaporation from storage reservoirs. Robust methods of water footprint (WFP) assessment will eventually help in the pricing of water and energy. Conventionally, WFP for hydropower plants is estimated by dividing the gross/net evaporation losses by power generation. This approach is highly biased when it comes to a small hydropower plant connected to a large reservoir. In this study, a two-pronged subjective–objective method is suggested for a reservoir with primary functions of power generation and downstream water release. The objective part is concerned with giving weight to the evaporation loss proportional to the water use while the subjective part is concerned with refining this by considering the real time reservoir operation conditions and taking into account the recommendations of the decision making authorities. The effect of timescale in WFP analysis is also studied and conclusions are drawn. Thumb rules for WFP estimation are evolved which will aid in such analysis. The implementation of the proposed methodology for any reservoir system is recommended using LabVIEW platform.