Chaffey Dam surged to 21.4 per cent on Wednesday afternoon after a few days of rain soaked the catchment and saw the Peel River in full flight, flowing into the dam.

Under conditions set down by the state government for the Chaffey to Dungowan pipeline, environmental flows are triggered when the dam reaches 20 per cent capacity.

WaterNSW confirmed 60ML of environmental water will wash down the Peel River across four days between Wednesday and Sunday.

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That water is dedicated for the environment and has been saved in Chaffey Dam by the state government - much like a bank account - since releases stopped at the start of this month.

A spokesperson for WaterNSW said local environment groups have now requested that "banked" water be released from the dam.

WaterNSW said the release is meant to replenish the stretch of Peel River between the dam and Duncans Creek, which is about 7km downstream.

Once that 60ML of water has flowed down the river, WaterNSW must make a release of at least three million litres for the environment everyday, while the supply sits above the 20 per cent trigger point.

Tamworth Regional Council (TRC) water and waste director Bruce Logan criticised the rules on Wednesday.

"I believe that releasing water all the time for environmental flows, like the 3ML a day, is a poor approach and we should have the approach that the government has adopted when it gets less than 20 per cent, which is to store the water and release it when there is an environmental need for it," he said.

Mr Logan also said council's preference is to have the multi-million-dollar pipeline switched on almost all the time to help save water through transmission losses.

Tamworth MP Kevin Anderson said in a statement on Wednesday orders from the NSW Department of Planning, Industry and Environment mean the pipeline must turn off and the releases must start again when the dam hits 20 per cent.

He said he would be writing to the Environment Minister's office to investigate the need for water releases from Chaffey Dam and to ask that the pipeline stay online until the dam is half full.

Despite losing some water down the river and losing the use of the pipeline, Mr Logan said Tamworth has better water security after the recent downpour.

"The state of our water supply is better than it was a month ago, so that's great," he said. He said council does not plan on drawing water from Chaffey Dam for the town's supply in the next few months.

That means not "very much" water is actually being released, according to Mr Logan, so it could still take some time for the dam to drop back to 20 per cent.

The dam is Tamworth's main water supply and the city has been on tight Level 5 water restrictions for more than nine months.

Tamworth users go through roughly 15ML to 20ML of water on average every day.

Residents aren't expected to get much relief though because the dam is not expected to hit 25 per cent full from this rain event.

That means strict Level 5 restrictions will stay in place until more rain falls in the catchment.

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