There is still blue green algae in Lake Wallace, but the alert has been downgraded, Lithgow City Council stated on Wednesday afternoon.
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The red alert, issued on May 3, is now an "amber alert".
An amber alert indicates that the water may have a green tinge and musty or organic taste and odour.
The water may be unsuitable for stock watering and recreational use on the water is at the users' discretion.
"The recent results show the reduction from red to amber, with fortnightly water sampling of the Lake continuing by Energy Australia, any changes will be reported," Lithgow City Council mayor Cr Ray Thompson said.
More information on algae alerts is available from the algal information line maintained by the NSW Office of Water, at 1800 999 457 or the NSW Office of Water web page at http://www.water.nsw.gov.au.
Lake Lyell is currently not affected by blue green algae and remains suitable for recreational activities.
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