Tasmania's government is taking legal action against the owners of the Bass Strait power cable over more than $70 million owed because of an outage six years ago.
The Basslink undersea cable, owned by Keppel Infrastructure Trust, stopped working in December 2015, sparking a six-month outage that contributed to an energy crisis in the island state.
Tasmanian Energy Minister Guy Barnett said the company had yet to pay more than $70 million to the state government and state government-owned Hydro Tasmania as required by an arbitrator.
The arbitrator found last year the outage was not a force majeure event.
Mr Barnett said the state government would not extend a standstill agreement with the company, entered into after arbitration.
Hydro Tasmania says the company has not satisfactorily progressed actions required to improve the cable's operational performance.
"For nearly 11 months, Tasmania has acted in good faith in the hope that a resolution could be found, including extending the standstill agreement in May this year," Mr Barnett said in a statement.
"However, the award payments to the state and Hydro Tasmania remain outstanding and (Basslink) has not adequately progressed the commercial and engineering requirements. It has also failed to secure refinancing.
"The state and Hydro Tasmania will now pursue their legal rights.
"The government is taking this action to protect the interests of Tasmanians as money owed to the state and Hydro Tasmania is ultimately owed to the people of Tasmania."
Mr Barnett said he was confident the legal action would not impact the state's energy security and Basslink would operate as normal.
At the time of the outage, Tasmania had received record low rainfall, putting a strain on hydro energy generation and forcing the government to import temporary generators.
Australian Associated Press
