Controllers began noticing degradation of the nickel-hydrogen battery in PAS-5 earlier 1998. The effect on operations was analysed in June 1998. During periods of peak solar eclipse, which occur twice a year, PanAmSat will be required to shut off a portion of the satellite's payload for some time.
The problem worsened in autumn 1998. PanAmSat stated in a filing with the U.S. Securities and Exchange Commission: "In future eclipse seasons, service to one or more existing full-time customers may be interrupted for brief periods which, depending upon their extent, could result in a claim by affected customers for termination of their agreements. The Company intends to submit an insurance claim for this partial loss. The Company intends to use PAS-9, an international satellite scheduled for launch in January 2000, to migrate its largest Ku-band customer from PAS-5. This will result in fewer transponders being utilized on a full-time basis on PAS-5. The Company believes that this will reduce the likelihood that full-time C-band customers on PAS-5 will experience service interruptions during upcoming eclipse seasons, although there can be no assurance that additional battery cell failures will not occur in the future."
PanAmSat reportedly received a compensation of US$185 million from its insurers after the satellite was declared a "total loss" because its capacity was reduced by more than 50 percent.
PAS 5 was leased in May 2002 to Arabsat, subsequently renamed Arabsat 2C and is currently known as Badr C.
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