TASMANIA (From The Australian Financial Review) -- Tasmania's electricity crisis won't be over until at least June.

The state's power supply has been disrupted by a drought and the failure of the Basslink undersea cable to Victoria's brown coal generators.

Singapore-owned Basslink, the operator of the electricity cable, said on Tuesday it had found the likely site of the damage in Bass Strait, about 98 kilometres from Tasmania.

Basslink chief executive Malcolm Eccles said the company's best estimate was that normal service wouldn't be resumed until late May, and that is subject to the weather.

Rod Bender, general manager of Norske Skog's newsprint and catalogue papers mill, said the location of the fault was a positive because it removed one of the uncertainties from Basslink's repair schedule.

"Less unknowns can only be good," Mr Bender said.

The electricity crisis is set to cost the tiny Tasmanian economy more than $100 million. Hydro Tasmania's storages have fallen to 15 per cent of capacity and can't bridge the gap.

Hydro, the state electricity monopoly, is spending $44 million to hire and install diesel generators that will cost $22 million a month to run. Rio Tinto's Bell Bay Aluminium estimates it will lose $21 million of aluminium sales, part of which will be offset by reduced expenses.