Cut in RHI tariffs following furore over botched scheme completely legal, court told
STORMONT’S introduction of reduced payments for the Renewable Heat Incentive scheme was “nowhere near” any abuse of power, the High Court has heard.
A judge was told primary legislation provided legal authority for the move to reduce tariffs in the botched green energy initiative.
Counsel representing the Department for the Economy also argued that even if the cost-cutting regulations are quashed, boiler owners could not revert to the higher rates.
With payment mechanisms under the old scheme now repealed, other potential remedies would have to be explored.
Judgment was reserved in action mounted by more than 500 members of the Renewable Heat Association NI Ltd.
They are seeking to judicially review the department for cutting payments assured under the original 2012 regulations. According to their case, it was an unlawful step against operators with a 20-year guaranteed rate of return on their investments.
But Tony McGleenan QC, for the department, insisted action was taken for legitimate reasons to protect the public purse, cor- rect flaws in the scheme and to comply with EU rules on State aid.
“That’s nowhere near an abuse of power,” he said.
Set up to encourage businesses and other non-domestic users to move to renewable heating systems, the scheme was plunged into controversy after the potential cost to taxpayers emerged.
With operators legitimately able to earn more cash the more fuel they burned, the bill has been projected at up to £490 million — a figure disputed by the association. According to its lawyers, the overspend could end up being as low as £60m.
However, the department re- sponded by claiming the figure could actually have reached £700m without the new cost controls.
The debacle surrounding the initiative led to the collapse of Stormont’s power-sharing administration, and the establishment of a public inquiry.
Earlier this year former Economy Minister Simon Hamilton set out revised 2017 RHI regulations at the centre of the legal challenge.
During his submissions, Mr McGleenan stressed the high hurdle facing the association in persuading the court to quash legislation passed by the Assembly.
He also contended that the 2011 Energy Act provided the power to change the regulations.
Gerald Simpson QC, for the association, countered by setting out the contents of Government documents and correspondence he said contained “clear, unequivocal representations” that the original rate would be paid for 20 years.
“The department says that at all times the 2011 Energy Act allows us to take away that tariff retroactively,” he told the court.
“If that was the belief then the representations I have identified were at the very least fundamentally misleading, and if they knew they had the right to take that away retroactively then they were more than fundamentally misleading.”
Mr Simpson also submitted that it was a “finite” number of boiler owners on the 2012 regulations, likely to decrease through wear and tear on installations.
Referring to any suspicions of potential abuse of the payment arrangements, he challenged the department to produce details so anyone involved can be removed from the scheme.
“There’s no serious evidence of misuse; if there was, something could have been done about it.”
Mr Justice Colton said he would deliver judgment as soon as possible.