Proposal documents lodged with the NSW government show the Cooma factory for the massive stored hydro project would be built on grassland favoured by the grassland earless dragon.

The reptile is found in Cooma and Canberra, and was once see in Bathurst and Victorian, with all the populations presumed to be the same species.

But University of Canberra researchers recently found them each to be their own distinct species.

Snowy Monaro Regional Council general manager Peter Bascomb confirmed the project still required an environmental impact statement lodged through the NSW government.

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Through a public notice made under Commonwealth environmental law, the tunnel segment factory was determined to be "not a controlled action" by the federal government.

Snowy Hydro, which oversees Snowy 2.0, refused to comment as the approval process was still pending but has previously said the grassland at the proposed site is degraded.

Proposal documents noted there had been 71 records of the dragon within 10 kilometres of the 32-hectare site.

Snowy Hydro 2.0 will create storage capacity for the massive hydro energy plant, creating tunnels from the Tantangara reservoir to the lower altitude Talbingo reservoir.

Most of the works for the project, including tree clearing, are set for inside Kosciuszko National Park.

The plant would allow the Snowy Hydro to pump water downstream, creating energy during peak demand, then pump the water upstream when demand was low to replenish the Tantangara reservoir.

Colong Foundation for Wilderness director Keith Muir said the federal government had abandoned the lizard.

"The federal government has an obligation to protect the earless dragon," Mr Muir said.

"Why this attitude of 'We're not going to be picking up the protections'."

"It's okay to flood national parks and dig them up and drill holes in them and [the federal government is] not going to protect any of the endangered animals."

Snowy Monaro council's Mr Bascomb said the project still had to go through the state government with developers preparing an environmental impact statement.

"It hasn't triggered the federal legislation but it has triggered the state legislation," Mr Bascomb said.

The finished factory would create concrete tunnel segments for the hydro plant's tunnels, running for 24 hours a day, seven days a week for three and a half years.

Planning documents said it would employ 125 people, with the possibility of construction beginning as soon as March, according to planning documents.

Mr Bascomb said council was considering what would be done with the factory once it had closed down, including having it produce tunnel segments for infrastructure works in Sydney.

"That has transport cost inhibitors to it," Mr Bascomb said.

But he said if the plant was likely to become abandoned once it finished producing segments for Snowy 2.0, it would get knocked down.

"Council in particular, but [Snowy Hydro] will also be working hard to ensure that there's a life for the plant beyond the requirements for Snowy 2.0," Mr Bascomb said.

"The [environmental impact statement] will need to address issues such as that."

He said the project meant jobs for the region, but also increased traffic in Cooma.

"From an economic perspective, we [the council] certainly see it as a great opportunity," Mr Bascomb said.