Water cooled voltage regulater

I have a 86 with a 170 I/O. The voltage gauge would show 16 volts intermittently. Now shows 16 all the time. If I turn on the bilge and well pumps it goes down to 15. The regulator is water cooled. I have been told the reg is about $500 if I can find it. A conversion kit was recommended. Has anybody run into the same problem?