Devastating floods have put Warragamba Dam works back up for debate.

The NSW government is reportedly reconsidering a proposal to lower Warragamba Dam's capacity to 80 per cent as a flood mitigation measure. 

Premier Chris Minns says the government is considering various flood risk reduction strategies, including reducing the dam's maximum level, following recent flooding. 

However, Minns said the state needs to secure an alternative water supply for Sydney before any capacity reduction could be implemented, considering nearly 80 per cent of Sydney's drinking water originates from Warragamba Dam.

The Kurnell Desalination plant, which can supply up to 15 per cent of Sydney's water during droughts, could be expanded to offset the potential water supply shortfall from the dam.

The revived proposal comes after significant rainfall leading to floods in multiple suburbs. Sydney's west received 300mm of rain, resulting in the Hawkesbury River reaching a peak of 10.52 metres.

Over 200 millimetres of rain landed in the Warragamba Dam catchment within 48 hours. The state government declared a natural disaster for 13 councils, activating immediate financial aid for affected homeowners.

The flooding incidents have also reignited discussions about a previously scrapped $2 billion plan to extend the dam walls by 14 metres, aimed at holding back floodwaters without increasing storage capacity. 

Mr Minns noted that a heightened dam wall would not have addressed the latest flash flooding, with nearly half of the floodwater originating from rivers and tributaries, not the dam.