A reservoir in one of the West's most scenic valleys could be drained without running its main beneficiary, San Francisco, short of water, the Interior Department said yesterday.

The Bureau of Reclamation, in a draft report requested by Interior Secretary Donald Hodel, said San Francisco could replace the water it receives from the Hetch Hetchy Reservoir in Yosemite National Park by making minor operating changes at two other reservoirs and drawing some water from a third reservoir downstream.

Hodel startled conservation groups this summer by suggesting that the time had come to restore the Hetch Hetchy Valley, considered a natural wonder surpassed only by Yosemite Valley until it was inundated in the 1920s to supply water and power to San Francisco. The battle over the valley remains a classic in environmental confrontations and helped vault naturalist John Muir and his Sierra Club into national prominence.

San Francisco officials have stoutly opposed Hodel's suggestion. The reservoir supplies about three-fourths of the city's water. The rest is sold, along with power from the dam's generating station, for annual revenues of about $38 million.

According to the draft report, San Francisco could capture enough water without the reservoir "to operate the city's existing conveyance system at full capacity and deliver almost 100,000 acre-feet more than is currently being used."

Replacing the dam's 150 megawatts of power capacity would not be so easy and might require the construction of new power facilities, the report said. However, it noted that California has more than enough electricity to replace the power "for the next 10 or 20 years."

San Francisco uses only about one-fourth of the power generated from Hetch Hetchy Reservoir, but sells the rest to nearby irrigation districts and industries in the Bay area.

The report contained no recommendations, and Hodel stressed that his Hetch Hetchy suggestion is not yet a formal proposal. But he said the analysis puts the department "one step closer" to restoration of the valley.

"This preliminary analysis is encouraging to me and suggests that we may yet be able to move forward with a plan which provides an alternative water and power supply in an economic fashion," Hodel said.

He acknowledged, however, that the process could be long. "It could be four to six years, easily" before a future interior secretary could decide whether to proceed with restoration of the valley, he said.

Hodel suggested the restoration last July, partly as a solution to overcrowding in Yosemite Valley, one of the National Park Service's most popular attractions.

About 71 percent of Yosemite visitors drive through the valley, occasionally creating traffic jams beneath its towering cliffs.

By contrast, the department said, Hetch Hetchy Reservoir is visited by only 3 percent.