25th September, 2017

THE RENEWABLE HEAT INCENTIVE – DUTIES OF OFFICERS/TRUSTEES/DIRECTORS – RHANI MEMBERSHIP

Earlier this year, coverage around the Renewable Heat Incentive (Northern Ireland) was prolific.  Some of it was accurate but sadly, much was not.

Since then, many charities and small to medium businesses have felt the effects of the emergency, 2017 Regulations.  For them, the impact came as a financial shock when the quarterly rebate payment either stopped abruptly or, petered out to a small sum.

This letter is addressed to the management and the decision makers in organizations who adopted renewable heat for ethical reasons and who, as yet have not joined our Association.

The financial impact upon Scheme participants, upon trustees of charities, church officials, committee members of sports clubs and on the directors of limited companies was not newsworthy.  All were party to an Agreement between their organization and the Department for the Economy.  That Agreement was entered into, in good faith.

The terms of your Agreement were varied by the Emergency, time-limited 2017 Regulations.

The Regulations are short in length but very significant to the Scheme Participants. There are key words such as “regardless” and “initial heat.”

The “regardless” component relates to the start of the calculation of the new annual allowances.

“(a) the tariff for the initial heat generated by the installation in any 12-month period commencing with, or with the anniversary of, the date of accreditation (regardless of whether that date falls before or after the coming into operation of the Renewables Heat Incentive Scheme….”

If, for example, your installation had an anniversary of accreditation in October, then the 2017 Regulations mean that the “initial heat” allowance (see below) started running from October 16.  Thus, for some, the “initial heat” (allowance) and subsequent allowance may have been consumed before the Regulations were even considered by the Assembly, or the operational date of 1 April, 2017.  In consequence, some charities, churches and small businesses stopped receiving RHI rebate cheques some months ago.

The Regulation also set two “limits:” 1,314 hrs per annum and 400,000 hrs – a total of 4040 hours in any year.  A rebate applied for “initial heat” for 1,314 hours (about 4 hours per day) and after that period, the rebate paid per KWht dropped to £0.0015.  After 4,040 hours in any year, no rebate is payable.  For operations that have a legitimate 24/7 requirement for heat, the limits state that after a total of 55 days of operation, the rate of rebate drops to £0.015 and after 170 days, it ceases altogether.

The Emergency Regulations approved by the Assembly expire in March 2018.  What happens then?  Announcement on DfE Website on 16 August, 2017.  As will be noted from last month’s announcement on the DfE website, the Department for the Economy intend to run the time-limited regulations at least until March, 2019 – possibly beyond that date.

LEGAL POSITION

Should a trustee of a charity, committee member or director take independent advice as to fiduciary duties?  Yes.   Please be aware that to have your Agreement restored by way of a Judicial Review might cost £180,000. Membership of RHANI will cost a fraction of that.

CONSULTATION

If the Department were to follow normal practice and protocol, it would consult with the legitimate stakeholder group – the operators of the RHI Accredited boilers.  There are about 1,100 such charities, churches, clubs, companies and individuals.  To date, we have just under 600 members.  It is our aim to recruit and then advise and represent all participants in the RHI Scheme.

VOICE

Dr Andrew  McCormick, Permanent Secretary, Department of the Economy and his senior staff recently met with a cross-industry delegation to discuss, amongst other matters, the ongoing pilot audits.  We expressed our concern that the audits were arbitrary and used qualitative assessments.  We called for an MoT – style audit – with clear standards, a pass certificate and if there is a need for remedial action a clear statement of what is needed for the “re-test.”  We were alarmed to be told that none of the senior staff in DfE has any qualification or experience in energy regulation and none has the Office of Government Commerce qualification in programme management.

LEGAL PRECIDENT

Perhaps surprisingly, these circumstances have occurred before.  In an uncanny coincidence to the Northern Ireland Regulations, Friends of the Earth challenged the Department for Energy and Climate Change. Click here.   They challenged the unlawful, backdated legislation and they won.  In a subsequent case, the Breyer Group fought for consequential damages – and won.  The dates?  2012 & 2015.

FINANCIAL IMPACT

The 2017 Regulations may well have damaged your church, club of company’s financial health.  The costs of doing nothing are high.  Those in one of the categories above, simply can’t ignore that they must take some form of action as they are bound by the duties of their appointments.

Join Us.  Therefore, we would ask you to join RHANI – because RHANI can help your organization, be your voice and challenge this unlawful legislation on your behalf.  The greater our membership, the stronger our voice will be.  Our constitution and Rules allow for the expulsion from the Association, of any member who is found to have abused the Scheme.  “Empty Shed Man, please don’t apply for membership.” Ethical trustees, governors, select vestry and directors, click here to join RHANI.

Follow Us.  Our website, YouTube channel and Twitter details are at the head of this letter.

Yours sincerely,

Andrew Trimble

Executive Chair

Renewable Heat Association of Northern Ireland (RHANI)