The Lower Hunter is setting the standard for water users across the state, having reduced consumption by 12 per cent in the past five weeks.
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And with no decent rain on the horizon, further water savings will be necessary as the region faces the possibility of harsher restrictions next year.
NSW Minister for Water Melinda Pavey thanked the Lower Hunter for its efforts to record a "significant reduction" in demand.
"NSW is experiencing the worst drought on record," Ms Pavey said. "Water restrictions are in force across the state, with the Lower Hunter having introduced water restrictions for the first time in 25 years five weeks ago."
The saving across the Lower Hunter is equivalent to the average water use of approximately 38,000 households over the same period.
"It's increasingly important we continue to work together to save water," Ms Pavey said. "If conditions remain very hot and dry over summer, Level 2 water restrictions may be necessary in early 2020."
Hunter Water's Executive Drought Lead Darren Cleary encouraged everyone to continue saving water by using four buckets less a day.
"It's really pleasing to see our community actively playing their part to reduce their water use," Mr Cleary said.
"I urge everyone to keep up the great work, particularly as we approach summer, because your efforts are making a difference.
"This saving demonstrates that it's possible to conserve water by making small changes in our daily lives, such as fixing dripping taps and reducing showers to four minutes.
"Hunter Water also remains committed to prioritising leakage across the water network, and will continue to play its part in conserving water by investing heavily in this area."