Charlie Smith, who worked for Canobolas and Cabonne councils for 42 years before his retirement, said he had inspected locations around Orange he believed could form fresh dams.

One is located at Mulyan Creek, near Kangaroobie, and the other at Lower Lewis Ponds, near the campground at Ophir.

"There's no use running pipelines out of dry dams," he said of the region's dropping water levels.

No water has been available from the Macquarie River pipeline since April, the Orange to Carcoar pipeline is taking water only as far as Spring Hill from Suma Park and Orange City Council will look into levels of arsenic from previous mining operations before pumping from Lucknow is considered.

MAP: More dams for Orange?

While acknowledging Mulyan Creek had been discounted before, Mr Smith did not believe the Lewis Ponds option had been investigated and it was not far from Suma Park.

"That water supply runs as far as Bathurst Road, it's a huge catchment," he said.

Council spokesman Nick Redmond said the council was always open to suggestions, but no dam would offer solutions in the short term.

"It's important to remember that we're dealing with an acute drought that's being felt across the state," he said.

"Apart from rain, there are no easy or simple answers to this problem."

Mr Redmond said the Mulyan option had been examined closely in 2013 as part of the Macquarie pipeline assessment, but was subject to high cost, a small catchment and limited water security.

"In 2013 it was estimated that dam would cost $43 million plus annual operating costs but only deliver a secure yield of 430 megalitres, about a month-and-a-half's supply for Orange," he said.

He said the Orange to Carcoar pipeline had been operational for some time, but because the region was in drought, it was unlikely to transfer water for urban use.

"Lake Rowlands has about one-third the water of Orange's dams," he said.