Basslink has issued a notice of dispute to Hydro Tasmania over the failure of the subsea cable that led to a December 2015 outage.
Basslink maintains the incident was a force majeure event under the Basslink Services Agreement.
By issuing the notice of dispute, Basslink aims to recover withheld funds from Hydro Tasmania.
Hydro Tasmania chief executive Steve Davy said the dispute would have no impact on the state’s energy security, or on the financial health of Hydro Tasmania.
Primary Industries minister Sarah Courtney said it would be inappropriate to comment on legal proceedings, however, it was important to recognise the state government was committed to the best outcomes for Tasmania.