The ACT's water supplier, ACTEW, is preparing an emergency water supply option in case inflows into Canberra's dams do not improve.

ACTEW's Dr Gary Bickford says Canberra has around 60 gigalitres in storage, or one year's supply.

He says that without substantial rainfall, Canberra faces a worst case scenario of running out of water in two years.  Mr Bickford says negotiations are under way with other cities in the Murray Darling basin to extract water from the Tantangara dam.  "We are working with the other governments in the Murray Darling basin through the senior officials group," he said.  "We are looking to see if we can get water put down the Murrimbidgee from Tantangara as part of the overall Murray Darling basin solution to the drought."

The ACT may start pumping water from the Tantangara dam in NSW as soon as next year if it is needed.