You’re kinda missing the point. The point isn’t that electricity is hard to generate underwater, it’s that electricity and water… doesn’t mix well. It’s only now that we are starting to get water-resistant (resistant, not even proof) computers, and those things only work because they’re created in a water-less environment were you can just put it in a waterproof casing.
Also, again, why would they do that? Remember that they don’t know about smelting metal yet. They’d need to create multiple watermills (using pretty godawful magnets, since they have no way of refining them), wire them together using graphite (since that’s basically the only non-metal conductor, and remember: they can’t smelt metal yet), which have to be isolated too, (and again, how would they do that? They can’t smelt plastic or something, so they’d need to surround it in a waterproof casing using materials they have to scavenge together), and then direct the electricity to a bit of metal. (You’d need a really high voltage too, since the metal is in ore form, which means a lot of it doesn’t even touch each other and you’d need to supply it with enough power to penetrate the stone inbetween) And why? They don’t know that smelting metal is something good yet. They have literally no reason to do any of those things.