This large project will see the expansion of treatment capacity for the next generation, meet multiple requirements from the NSW Environment Protection Agency (EPA) as part of council's operational licence, protect the facility from flooding and sea level rise impacts, and see solar power installed to reduce the carbon footprint of the site.

But before any of this can take place council staff must carry out an options assessment and design, in preparation for the upgrade.

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A sum of $535,000 has earmarked in the current 2021/22 budget for this comprehensive assessment which must investigate a number of issues and will be carried out in conjunction with the EPA and the Department of Planning, Industry and Environment.

This money will come from the sewer reserves which is built up through developer charges, where new subdivisions have added to the Bega sewer network, and existing customer charges.

Council's water and sewer manager Chris Best explained that the purpose of the sewage treatment plant is to protect the environment by treating sewage from homes and business.

"After treatment the plant discharges the effluent either to the Bega River or to a local farmer for beneficial reuse," Mr Best said.

"Other opportunities for re-use are being investigated as part of the recycled water strategy project. The sludge removed from the sewage is 'stabilised' at the site to make biosolids and then reused on local farms," he said.

A contractor picks up the stabilised biosolids from the six sewage treatment facilities in Bega Valley and takes them to local farms. The contractor also monitors the farm application site for any issues and is responsible for meeting any EPA requirements.

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The sewage treatment plant has an Environment Protection Licence issued by the EPA which has asked council to reduce its pollution risk at the Bega site.

"The EPA has placed a requirement on our licence to be able to manage sludge on the site better," Mr Best said.

"Although we have no pollution incidents caused by sludge, we rely on an external contractor to dry the sludge with specialist equipment rather than having enough stabilisation and drying capacity on the site," he said.

"They have also asked us to improve the handling of flows during wet weather to ensure adequate treatment is achieved. This is mostly because Bega is an older town with leaky clay sewer pipes and stormwater connections into the sewer. When it rains or floods, Bega sewage treatment plant is inundated. This could be managed better, with more capacity overall," Mr Best said.

Flood modelling has shown that parts of the plant may flood during an extreme event and so site protection will be investigated.

Although over $1m is budgeted each year for renewing older sewage pipes it's not a job that can be carried out all in one go.

"It can also be difficult to spot the hidden stormwater connections that dump huge amounts of water into the system during rain," Mr Best said.

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"A bolstered maintenance budget from this financial year, will allow us to add to the existing pipe renewal program. This maintenance will include targeting stormwater cross-connections using smoke testing, patching smaller holes efficiently, and sealing maintenance hole lids," he said.

The planned spend for fix leaking pipes is on top of the Bega STP project and is for the whole of the sewer network across the shire.

Finding and repairing leaks and other connections is a long-term undertaking and so the STP upgrade must "plan for the worst" in terms of capacity.

"With Bega's population growing, any successful maintenance program will still help protect the environment into the future," Mr Best said.

"We are preparing for the total cost over the next few years to be up to $10m. The project has not yet started. We are hoping to begin options assessment this financial year. Working with the EPA and DPIE, we will agree on the best options and complete the design and construction over the next two years."

Council will be expanding the facility to the west on council-owned land as part of the upgrade program. The site expansion will take up council-owned land north of Taronga Crescent in Bega, adjacent to the existing treatment plant.

"It's not yet clear how much land will be required to expand capacity, however the goal will be to stay as far east as possible," Mr Best said.