This paper investigates the operational performance and stability of a regional power grid with a high penetration of small hydropower plants operating under rated conditions. Grid monitoring and simulation results reveal that voltage levels frequently exceed permissible limits and exhibit significant fluctuations. The primary radial configuration of the network is the cause of often the outages of transmission lines that occur at times of peak generation. These conditions adversely affect generator operation and may contribute to equipment degradation. To enhance grid reliability and ensure stable hydropower plant operation, several mitigation measures are proposed, including the reinforcement of the transmission network through the construction of new lines to enable a ring configuration, the mandatory implementation of excitation control systems for generating units, the establishment of a real-time grid operation center, and the deployment of real-time diagnostic tools for optimized generator utilization. The proposed measures give a very handy scheme to raise voltage stability, operational reliability, and the safe inclusion of distributed hydropower generation into regional power systems.