The Tasmanian Government has effectively scrapped its commercial contract with Basslink. 

Tasmania energy minister Guy Barnett says the state-owned utility Hydro Tasmania is protecting its legal rights by terminating the Basslink Services Agreement (BSA). 

It is the latest move in an ongoing dispute between the company that operates the Basslink undersea cable (which links Tasmania’s grid to the Australian mainland) and the state. 

Issues have been ongoing since the Tasmanian state government sued Basslink for damages over an extended interconnector outage that hit the island in 2015.

A particularly dry spring season left Tasmania without its normal hydro electricity generation capacity, forcing it to import more electricity from Victoria.

After a long legal battle, arbitrator High Court Chief Justice Robert French found that the 2015 cable failure was caused by thermal overstressing arising from Basslink Pty Ltd’s (BPL) operation of the interconnector.

Justice French awarded the state and Hydro Tasmania in excess of $70 million for costs related to the cable failure, and ordered Basslink to improve the operational performance and reliability of the cable.

In late 2021, the Tasmanian energy department advised that the state and Hydro Tasmania would not be extending their agreement, forcing Basslink into voluntary administration.

Hydro Tasmania says it has made “a good faith offer” for an interim arrangement to restore key elements of the BSA while the parties discuss alternative arrangements.

Hydro Tasmania says it is willing to discuss a way to provide funding to Basslink during the receivership and help transition to an alternative commercial model.