The design of the undersea power cable that links Tasmania to the mainland is "inadequate" and data is being collated for a pending legal dispute, according to internal Hydro Tasmania documents.

Late last year Hydro, the state-owned electricity enterprise, revealed a "short-term" measure to limit Basslink's capacity of 500 megawatts, significantly less than the maximum export capacity of 630 megawatts.

It was the recommendation of a report commissioned after the catastrophic failure of the Bass Strait cable in 2015 that plunged Tasmania into an unprecedented energy crisis, which cost the Government an estimated $180 million to secure the state's power supply — including shipping in 100 back-up diesel generators.

The report said "two global experts" were of the opinion the cable could "safely and reliably operate above 500MW in future, if Basslink adopts a new control system and extends the cable's 'rest period' between polarity reversals (between export/import and vice versa) from two minutes to five minutes".

Emails seen by the ABC show that earlier this month Hydro staff were told the subsea connector "may have been initially damaged when running above continuous rating, through overheating, because its design and operation were inadequate".

That has meant Hydro has been unable to export power at maximum capacity, subsequently reducing the amount of money that can be made selling power.

Staff have also been told to "keep a record of any costs incurred".

"This may enable cost retrieval through a legal process at a later stage" the email states.

Senior Government sources have said the cost of lost exports will comfortably stray into multi-millions of dollars.

Hydro has refused to release any details about the matter, saying "our views regarding legal matters are confidential".

"We're focused on ensuring Tasmanians have reliable and fully-functioning Basslink" a spokesman said.

When asked about the matter on Sunday, Premier Will Hodgman praised the "good news" of the cable still being operable.

"There are legal matters obviously underway and matters that are being worked through by Basslink and Hydro, which are well understood.

"The good news is that the link has been operating and I think that's a positive thing," he said.

Labor, Greens concern over cable's integrity

Labor Leader Rebecca White is demanding more detail.

"I think what we need here is greater transparency from the government, particularly for our major industrials who right now need certainty about this," she said.

"Obviously Hydro Tasmania is putting in place further precautions now to trade across Bass Strait because they're nervous about future outages," she said.

Greens energy spokeswoman Rosalie Woodruff said it was clear Basslink was "damaged".

"Tasmanians have a cable that is at risk of going down again.

"It seems it will never be able to export electricity at the levels it could do before the cable went down."

Hydro said there was no risk to energy security, describing Tasmania's dam storage levels of 38.1 per cent as "very secure for late summer".

Basslink has been contacted for comment.