Council spokesman Nick Redmond said the man was issued with the fine last week.

"A local person was using town water to fill up what appeared to be a rainwater tank and then using that tank to water a lawn," he said.

Watering lawns is banned under Orange's tough Level 5 restrictions.

Mr Redmond said in February about 10 letters were sent out to residents following people complaining about others inappropriately using water.

He said the council's water ranger also visited properties to follow up complaints.

The council has not revealed the amount the resident had been fined stating it was confidential.

However, fines for misusing water during restrictions start at $220 and rise up to $2200 plus costs for matters taken to court involving repeat offenders.

Mr Redmond said complaints about water misuse appeared to be declining.

He said 50 letters were sent out to residents after public complaints in January.

"It's a sign that the vast majority of residents are doing the right thing to help us all through this drought," he said.

"Our water ranger continues to work with residents where there are concerns about their level of water use.

"It's a co-operative approach that's producing results but the option of a fine remains on the table if the council isn't able to get the result that is needed."

Two people have also been fined in Bathurst in January for illegal water use.

However, the figure in Dubbo is not known as Dubbo Regional Council has not revealed whether any fines have been issued.

The latest council figures show water use in Orange increased from 120 litres per per person a day to 138 litres last week. It is still below the Level 5 target of 150 litres.

The combined storage of Suma Park and Spring Creek Dams is 21.16 per cent.

While rain is forecast for this week the Orange region is still on track to move to tougher Level 6 water restrictions in mid-May.

Without substantial falls it is also expected Orange will run out of water early next year.