Energy operator Basslink has been hit for $38.5 million in damages over the outage of its Tasmanian interconnector in 2015.
The company and the Tasmanian government on Thursday night confirmed that arbitration of several disputes around the outage had found in favour of the state and Hydro Tasmania.
The arbitrator found the outage was not a force majeure event in awarding the damages, Tasmanian Energy Minister Guy Barnett said.
The state government was now working through the complex details of the arbitrator’s award, Mr Barnett said.
“Importantly, Tasmania’s energy position remains secure with water in storage above the prudent storage level,” he said.
Basslink operates the undersea electricity cable running between Tasmania and Victoria, which connects to the national energy grid.
It stopped working in December 2015, sparking a six-month outage that contributed to an energy crisis in the island state.
Tasmania had received record low rainfall at the time, putting a strain on hydro energy generation and forcing the government to import temporary generators.
Basslink’s claim for $31 million against Hydro Tasmania for unpaid fees during the outage was found not to be recoverable, the company said.
Basslink chief executive Malcolm Eccles said the organisation was “extremely disappointed” with the outcomes.
“We will need some time to review the decisions and consider the implications,” he said.
“In the meantime, Basslink continues to operate efficiently and reliably, connecting Tasmania to the national electricity market.”