The Tasmanian Government is demanding compensation from Basslink over the 2015 undersea power cable outage.
The state looks set to begin legal arbitration next week unless the company stumps up tens of millions of dollars.
The cable connecting Tasmania and Victoria was out of action for six months at the same time as an extended rain shortage saw the state’s dams fall to record low levels.
The combination of events threw the state into an energy crisis, with no capacity to import power.
An independent report produced by Basslink could not find a precise cause for the fault.
The company then claimed it was proof the failure was a “force majeure” event, or unavoidable catastrophe.
The Government disagreed, and Energy Minister Guy Barnett said he had written to Basslink Proprietary Limited (BPL) and advised that the State considered it was entitled to compensation for its losses.
In a statement, Mr Barnett said the Government would begin the legal process next week unless compensation was agreed to.
“We have never accepted the original assertion that the cable outage in 2015 was the result of a ’cause unknown’,” he said.
“The expert reports into the cable failure delivered in December 2017 indicate that BPL had operated the cable in a manner that allowed it to exceed its temperature design limits during a number of periods in its service life.”
The Minister did not say how much the state was seeking to recoup, but it was expected to be tens of millions of dollars.
Basslink has been contacted for comment.