Cadia Valley Operations has not been using two of the eight megalitres a day of Orange's treated effluent it is entitled to since October.

The water has been used to supplement environmental flows into Summer Hill Creek rather than releasing stored water, which will end in January after dam storage dropped below 25 per cent.

But this week's water forums held by Orange City Council raised the possibility of reusing treated effluent, or sewerage, as drinking water.

Strategic water manager Wayne Beatty said it was a water source independent of climatic conditions.

"It might not be palatable, but effluent reuse is something we really need to start putting on the drawing board," he said.

He said Orange might be more amenable to the idea given residents had adjusted to stormwater harvesting.

"My gut feeling is our community is up for it - the quality of stormwater is the same, if not worse, than using effluent," he said.

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Questioned on the council's capability to treat it to drinking standard, chief executive officer David Waddell said there were no technical constraints.

"We could use it in industry, it doesn't mean we have to go all the way to drinking water," he said.

However, Mr Beatty said being able to reuse effluent depended on claiming it back from Cadia.

The Central Western Daily asked Orange City Council and CVO to comment on whether the parties were amenable to that discussion and whether effluent reuse would be considered a permanent or drought-only measure.

Neither addressed the question, but on returning the two megalitres of effluent, acting CVO general manager Aaron Brannigan said the company was working with the council.

"Orange City Council and Newcrest have a long history of working together to benefit the local community and this is another example of that collaboration," he said.