The Renewable Heat Association

The Renewable Heat Association for Northern Ireland

Author: RHANI (page 1 of 4)

Department for the Economy – 21st December 2017

“Since the introduction of the 2017 Regulations the overall cost of the Scheme has reduced and the return on investment for participants has been brought more into line with the original intention of the Scheme. It is our intention, subject to the necessary legislative approval, to extend the 2017 Regulations for up to a further year, until 31st March 2019. This will be a temporary measure to provide us with the opportunity to develop and consult on the long term arrangements needed for the lifetime of the Scheme to balance our obligation to the Scheme beneficiaries with our wider responsibility to safeguard the public purse.”

Date for Judgement of Judicial Review

A few minutes ago, we learned that the Judgement in our Judicial Review will be handed down in the High Court, on Thursday 21st December at 11:00am.

Members may wish to attend.  RHANI will handle all press inquiries and will provide a press release.  At this stage, and until the Judgement is handed down in Court, we do not know if our complaint has been upheld.

JUDICIAL REVIEW – LAWFULNESS OF DEPARTMENT FOR THE ECONOMY ACTIONS

A Judicial Review commences on 4th October, 2017.  The parties to the matter are the Renewable Heat Association Northern Ireland and the  Department for the Economy (Northern Ireland).  The Renewable Heat Association is challenging the lawfulness of the emergency 2017 Regulations – http://www.legislation.gov.uk/nisr/2017/32/contents/made

The Association, representing the interests of its approximately 600 members in their ethical use of green energy expects the review to last three days.

A series of articles explaining the interaction between the Association and DfE and other, related matters, is to be found at www.rhani.org/news

A series of related short video extracts is to be found at https://www.youtube.com/channel/UCtR5sa17SSVFxzjGEktO8YA

#DfE (NI) CRASH FOR CASH

Andrew Trimble, Chair of the Association challenging DfE said:

Legal Challenge.

“We can not comment on the forthcoming Judicial Review case which commences 3 October, 2017 but I can confirm  we have met and corresponded with Dr Andrew McCormick, Permanent Secretary of the Department for the Economy.

RHANI Meet DfE Top Team.

I can confirm that a broad range of industries were part of the delegation that met with Dr Andrew McCormick and his top team involved with the delivery of Energy policy in Northern Ireland on Monday.

Agenda – Audit & Promotion of Best Practice.

On the eve of the meeting, Dr McCormick insisted that the meeting did not discuss policy plans or cost savings elsewhere in the renewable sector.

Audit – Best Practice

It is worrying that none of the top team in DfE has any qualification in energy regulation.

It is of concern that those running the RHI programme have no Office of Government Management programme management qualifications.

A failure of programme governance in DfE was a PWC audit observation before the DfE scandal broke and was also part of the DETI Bytel scandal.  PWC had recommended that DfE adopt the Department of Finance manadated governance framework.

RHANI left a programme governance guide with Dr McCormick.

Scrupulous Audit

The Association left a paper which suggested amendment to the style, structure, content and governance of what have been described as “Pilot Audits.”

The Chief RICARDO auditor had previously confirmed that he was part of the earlier contractor group which had advised on the design of the RHI NI  Renewables Programme.

RICARDO was also part of the now-dismissed” Op HEAT”  audit of 295 sites targeted by DfE.

Of the 295 targeted, 2 have been excluded – reported by CAGNI in the 2016/17 DfE Resource Accounts, June 2017.  None of the other 293 have had any communications to confirm that targeting of them was a DfE mistake.  No apologies have been issued by DfE.   Dr McCormick directed staff to “look into that.”

Op HEAT criticised the same energy practices promoted and authorised by DETI/DfE officials which were compliant with the changes brought in by the 2015 Regulations.  RHANI left Dr McCormick copies of his Department’s emails and regulations which promoted these practices.

Op HEAT and these Pilot Audits followed an open market tender process and the cost to the public will be known.

Release of Information

There is an ongoing criminal investigation into the “leaking” of personal information to the media.

Comment:

The cost to the public purse, of the Friends of the Earth v DECC and the Breyer Group V DECC in similar legal challenges, 2012-2015 is also known.

NEWSLETTER: RHI: The untold story of farmers’ desperation amid stigma and debt

Mental trauma as honest boiler owners struggle to pay bills The sudden decision to retrospectively slash the terms of the RHI scheme has left many legitimate users facing financial ruin, with some farmers facing the prospect of losing virtually everything they own, the News Letter has been told.

Under pressure to address the failure of the disastrous scheme and amid allegations of some grotesque abuse, DUP MLAs voted through emergency retrospective legislation which turned on its head the sums on which many RHI claimants had been able to persuade banks and other lenders to lend them money.

This week the News Letter has spoken to five RHI claimants, most of whom are farmers, who say they are facing extreme hardship as a result of that decision and who allege that Stormont’s Department for the Economy – where it appears that not a single civil servant has been disciplined for the RHI debacle – is making them pay for the failure of officialdom. This newspaper has verified the identity of all those who have spoken to us, but most of them asked not to be named either out of fear that they would be targeted by the department or due to being tarnished in many people’s eyes by even being identified with RHI.

One man broke down as he spoke of his debt being like a “ball and chain” which now has him working 100 hours a week; another man told how his father had collapsed under the stress of his financial situation and spent three weeks in hospital.

Amanda Maxwell, whose husband Fred is the largest poultry farmer in Northern Ireland, showed the News Letter financial statements which set out the £2.1 million scale of their investment.

She said that as well as the acute financial pressure, they now face social stigma from people who wrongly assume that every RHI claimant was abusing the scheme.

She said that it was like being in a room full of innocent people where everyone knows that one of them is a rapist, leading to everyone facing suspicion until the innocent men in the room are cleared and added: “That’s how I feel – there are days where I don’t even want to go out…even though we haven’t made one penny of profit from RHI.”

Another farmer outlined eye-watering figures for his exposure to the scheme, setting out how the loans for his boilers were secured against his farm and involved finance houses as well as banks, meaning that he stands to lose almost everything he owns if the situation continues and his creditors move against him.

Another RHI claimant, who is not a farmer and who uses the heat for a business process which was being undertaken long before the RHI scheme opened, said that he is now working 100 hours a week in an attempt to keep up his payments to the bank.

The man said that he was initially turned down by his bank when he asked for a loan but he had “really pushed” the bank and took his borrowings to the limit.“I wish I’d never gone anywhere near it,” he said, adding that in his view it was possible to abuse the scheme but that he had not done so.

Dismissing the erroneous perception that most of those on the RHI scheme had some link to the DUP, the man said “I’m not in the DUP or any party – I think they’re all useless”.

Breaking down, the man said: “It’s a nightmare. I’ve borrowed £350,000 over 10 years. Next month I’ve an £8,000 payment to make. I’m working night and day to pay that. I’m spending no time with my family. I could strangle the civil servants because they aren’t accountable – I’ve done nothing wrong but I’m the one who’s paying.”

Like most RHI claimants, he has still not been audited but said: “I wish they would come out and audit because this is putting my head away.”But he expressed alarm at “very technical questions” which those who have been audited have faced, leading him to fear that they could be set up in a way which leads to honest claimants being excluded from the scheme on a technicality.

Another RHI claimant who has three boilers on his farm said that he had borrowed £180,000. The farmer said that his youngest daughter is still being teased at school about her father’s boilers by people who believe that he is making a fortune when in fact his business “is under immense pressure”.

The veteran farmer said he spent almost two hours on the phone to a businessman who is “on his knees financially” as a result of the changes.

He said it was “farcical” that RHI had been set up so that boilers were never audited prior to payments commencing and that it was “abominable” that there had still not been a start to a 100% audit of every boiler.The farmer said that he believed there had been “gross incompetence” by the department which he feared is now wanting to “get as many boilers out of this scheme as possible and deflect that this was about corrupt fraudulent farmers and businesses trying to take public money”.

One man who runs a business which installed RHI boilers said that due to Stormont’s incompetence his industry was now “basically dead in Northern Ireland – we had one enquiry in the last year”.

He contrasted the situation here with that in the rest of the UK where cost controls – stripped out of the regulations by Stormont – manage the available budget.“To me, it was gross incompetence by the Department for the Economy,” he said.

The man said that he does not have a boiler himself but his father does and “on current levels he cannot repay his loans…he collapsed one day and was in hospital for three weeks. The stress is palpable. You’ve got the financial stress and then the emotional stress because they don’t feel able to speak to anybody.

“I know someone who went to his GP who, in his view, was less than sympathetic. There is an underlying sentiment that other services have taken a hit and RHI is responsible, which I don’t believe is the case.”

Next month a legal case taken by the claimants’ umbrella group, the Renewable Heat Association of Northern Ireland, will be heard in Belfast High Court. The man said that if that challenge fails there will be “mass bankruptcies”.

Pointing to the pre-election leaflet from the DUP which claimed that they had managed to stop the RHI overspend, the man said that in his view the law had been changed as a “political decision to let the DUP put out that election leaflet – the civil service got is grossly wrong the first time round and the DUP got it grossly wrong the second time round.”

When asked if it had a duty of care to those who it encouraged to enter the scheme, the department said it was “fully committed to addressing concerns” around the scheme but that “the operation of the scheme with regard to individual participants is the subject of legal proceedings and it would not, therefore, be appropriate for the department to comment further at this time”.

The department said it was “fully committed to a 100% inspection programme” and that an inspection process had started last month. The department said it had met representatives of boiler owners this week about the inspections and “agreed to consider a number of improvements that were suggested”. I

t added that the inspectors were “professionally qualified and experienced in inspecting RHI installations in a number of jurisdictions”.

When asked if a single civil servant had been disciplined as a result of the debacle, the department said that it had begun an “independent investigation to ascertain the facts” about the scheme but that due to the public inquiry that had been suspended.

Read more at: http://www.newsletter.co.uk/news/rhi-the-untold-story-of-farmers-desperation-amid-stigma-and-debt-1-8153519

BELFAST TELEGRAPH: Antrim firm which pledged job boost with power plant project takes Stormont to court

By Jonathan Bell

A major project which would have brought hundreds of jobs to Co Antrim is at the centre of a legal challenge against a Stormont department.

Papers were lodged at the High Court on Friday seeking a judicial review against the Department for the Economy for its exclusion of a major power plant plan from the botched Renewable Heat Incentive scheme.

It centres on the original inclusion of combined heat and power plants in the RHI scheme. Initially the department had said the RHI scheme would support the plants.

However, the department did not apply for their inclusion for state aid to the European Union, meaning it could not provide any financial assistance. It also meant the department’s £490m projection of overspend in the scheme was exaggerated by at least £160m.

Agrifood business AA McGuckian Limited is behind the challenge. It invested over £500,000 in getting planning permission, employing consultants and obtaining finance for the project.

It’s unlikely the £26m project will now go ahead.

The plant, in Cloughmills, would have created 200 construction jobs over two years and another 100 when it became operational.

Barney McGuckian told the Belfast Telegraph the scheme represented a “major loss for Co Antrim and Northern Ireland”.

It was only in June this year the company was informed by the department the project would not be eligible for funding from the RHI scheme and it would be 2019 before it could be considered for financial support.

Brian Moss, of Worthingtons Solicitors representing the firm said his clients, with a “heavy heart” felt they were forced to take the case.

“My client had invested heavily to the tune of over £500,000 based on communication received from the department,” he said.

“For the client now to be told two years after applying for planning permission and obtaining finance for the project that the tariff is no longer available has left them with no option but to seek redress through the courts for the losses they have accrued.”

The Department for the Economy said given legal proceedings it would not comment.

The legal challenge is understood to be the fourth taken against the department over the RHI scandal.

It was taken to court by the association which represents boiler owners in a bid to prevent their names being published. That resulted in the department given the green light to put the names out, but having to pay all the legal costs.

The department faced a similar challenge from an individual seeking to have his name withheld from the publication of claimants.

The Renewable Heat Association is also fighting to have the original tariffs set out in the 20-year scheme re-instated. That case is set to be heard in October.

An inquiry into the RHI scheme, which ultimately brought down the Stormont government, is set to begin public hearings.

Belfast Telegraph Digital

 

 

[Source: Belfast Telegraph http://www.belfasttelegraph.co.uk/news/rhi-scandal/antrim-firm-which-pledged-job-boost-with-power-plant-project-takes-stormont-to-court-36113740.html]

Media Coverage – Irish Farmers’ Journal

[Source: Irish Farmers’ Journal]

BBC: 8,600 bags of wood recalled over bark beetle fears

8th September 2017

 

Six major retailers in Northern Ireland have had to destroy or send back thousands of bags of firewood they had on sale because it posed a potential risk to commercial forestry.

A total of 8,600 bags of conifer firewood were taken off the shelves.

It followed an inspection by plant inspectors from the Forest Service.

They found the wood was from Britain where a certain type of beetle exists that is not present in NI, and that the wood did not comply with regulations.

Were the bark beetle to be carried in the firewood and become established in Northern Ireland it could cause “significant damage” to coniferous trees.

Strict conditions

Commercial forestry is an important business in Northern Ireland; last year the Forest Service sold 400,000 cubic metres of wood.

There are strict conditions around importation of some firewood under plant health regulations.

It can carry serious tree pests like species of bark beetle or other diseases.

To reduce the risk of their introduction special rules apply to species of tree known to be hosts.

They require firewood produced from spruce, pine or other coniferous trees being brought into Northern Ireland to be stripped of pine, or to be kiln dried and accompanied by a plant passport.

The inspections happened in March, and the incident was recorded in the Forest Service’s annual report.

[Source: BBC Northern Ireland http://www.bbc.co.uk/news/uk-northern-ireland-41199075]

UK HUMAN RIGHTS BLOG: Small solar: Court of Appeal confirms that changes were unlawful

Secretary of State for Energy and Climate Change v. Friends of the Earth and others, CA, 25 January 2012, read judgment 

So, after an anxious wait for the affected businesses, the Court of Appeal has confirmed today that the Minister was too hasty in the way he went about modifying the scheme for subsidising small solar power schemes. But, as often, the Court went about things differently from the judgment below (see my initial and follow-up posts on this)

The Court held that the Minister had no power to do what he did, which was to say he was going to modify the subsidy rules in respect of schemes which had become eligible prior to the modification coming into effect. The legislation and rules are characteristically impenetrable, but the Minister proposed in a consultation, which closed on 31 October 2011, to reduce the subsidies for schemes which became eligible after 12 December 2011. The key point is that he proposed that this modification should come into force on 1 April 2012, and that those who had signed up to such a scheme between December 2011  and April 2012 lost much of their subsidy from 1 April 2012. The original scheme paid participants 43.3p per kilowatt hour for 25 years. The proposed revised scheme for these new joiners would pay them that rate until April 2012, but thereafter 21p per kilowatt hour for the rest of the 25 years.

Though the speed of the proposed changes (6 weeks from consultation to 12 December) is surprising, the idea that you can modify a scheme to reduce payments in future is not in itself obviously unlawful. The problem for the Minister is that nowhere in the legislation could he find a provision which said – you can amend the rates of return for a participant after the participant has joined the scheme. On the contrary, the secondary legislation made it clear that the whole premise of the scheme was to confer on participants a fixed return. After all, they were being asked to shell out in order of £9,000 in return for some guaranteed return on their money. Some people are committed to green technologies, but many are not, and without a certain amount of  financial persuasion, the latter were not going to part with their money.

At one level, this decision is a micro one which is not going to keep most of us awake at night – did section 41 of the Energy Act 2008 allow such modification? No, it didn’t, said the Court. But the Court of Appeal touched on interesting general questions of retrospectivity and retroactivity. The difference?

45…. Retroactive changes change the law in relation to events which have taken place in the past….. Retrospective changes alter existing rights, but only in relation to the future. The presumption against altering vested rights in the future is weaker than in relation to retroactive change…

46. Although it is weaker, there remains a presumption against the alteration of existing “vested rights”, that is, those rights which, once acquired, fairness demands should not be altered. Such rights are described by Lord Herschell in Abbott v Minister for Lands [1895] AC 425 at 431, as those of which a beneficiary has availed himself before the law is changed.

As Moses LJ pointed out

45….. The proposed changes in respect of installations becoming eligible before the modifications come into effect do not neatly fall into either category. They are more akin to the category of prospective change. Nonetheless, anyone choosing to achieve eligibility in relation to installation between 12 December 2011 and 1 April 2012 gains a right to a fixed rate by reference to FIT Year 2 for 25 years.

48…..The proposed modification has retroactive effect. If it comes into force on 1 April 2012 it takes away that pre-existing right to 25 years of payments at 43.3p per kilowatt hour and substitutes for it a right to that sum only for a few months and thereafter at the lower rate proposed of 21p per kilowatt hour. The power asserted by the Secretary of State is a power to vary the rate after an installation has achieved eligibility and thus after the rate has been fixed for 25 years, subject only to RPI. That is a retrospective alteration of the scheme which confers what, pace Lord Rodger, may be described as a vested right to a fixed rate.

So, a bit of retroactivity and retrospectivity, all complicated by the fact that the measure is only proposed to come into effect in the future – not surprising that it was difficult for anyone to analyse its precise legal effect.

The Minister’s real problem, of course, was that these schemes had become too popular, the capital cost had fallen, and hence the rate of return had become too high for our careful civil servants to bear. It was not costing more per scheme than they thought it would cost, but more schemes were being proposed than the Department had bargained for, so the overall bill was higher.

Some initial reflections on the judgment.

The first is that you might get yourself into trouble if you propose a prospective change with retroactive effect unless your statute firmly so empowers you. No problem if you announce that from a certain date new schemes will be governed by new rules – that was plainly within the scope of the statute. But it was the mix-and-match of entitlement and retroactivity which was the stumbling block for government.

The second is that the political net effect of all this is not good. The rushed-through changes to what was an enlightened – if in the end over-generous – scheme hardly encourage cautious investors to trust government departments in future. A rather unfair reading of what DECC did is that as long as the schemes were fiddling at the edges, they were happy, but once, by its success, it threatened to make a difference and cost real money, they ran scared. In fact why they sought to change the rules is plain, given that the UK now has £1 trillion of debt.  But unfair impressions stick, and it is pity that this has occurred in an area where perceptions are so important.

Thirdly, the interesting point in the judgment below about when you can judicially review a proposal – it disappeared as everyone sensibly wanted to get out of the Court the right answer to the unlawfulness point.

In my last post I drew attention to the poor employees waiting to learn if they were being laid off as a result of this decision. Obviously, this result is good news for the companies involved and their workers. But don’t forget that the changes can and will affect anyone who signs up for a solar photovoltaic scheme after 1 April 2012, and even that assumes that DECC cannot amend the statute in the meanwhile.

[SOURCE: UK Human Rights Blog https://ukhumanrightsblog.com/2012/01/25/small-solar-court-of-appeal-confirms-that-changes-were-unlawful/]

BELFAST TELEGRAPH: Farmers paying cost of Stormont uncertainty: Union frustrated over RHI cap extension plan

By Jonathan Bell

 

Farmers’ union the UFU has said proposals to maintain restricted payments from the botched Renewable Heating Incentive Scheme could lead to “irrevocable financial damage to those businesses in the scheme”.

The Department of Economy has said it is seeking to extend caps on the RHI scheme for a further year. It had brought in restrictions, introduced by the then minister Simon Hamilton in a bid to cut costs.

Auditors found serious flaws with the potential for huge fraud due to a lack of tariff caps saying some participants could “burn to earn” from the London- and Stormont-backed £1bn scheme.

The Department of Economy estimated a £490m overspend in the 20-year scheme although have since conceded it was exaggerated by at least £160m.

The UFU said Northern Ireland farmers were having to pay the price of the ongoing lack of a government at Stormont. It said it was alarmed at the prospect payment restrictions would continue on for longer than was originally intended.

UFU chief executive Wesley Aston said: “We wanted clarity from the department around the RHI tariff situation. The permanent secretary has confirmed that while the revised tariff extension remains a proposal, he has clarified that it can only proceed with the return and approval from a government Minister.

“There is a fear amongst boiler owners that the 2017 temporary measures could be in place for much longer than necessary. Many farmers have made long term investments in a government-backed programme and it is wholly unacceptable they should have to bear the financial burden due to the ongoing uncertainty at Stormont,” he added.

Inspections are underway by a Stormont-appointed firm to determine if any of the RHI businesses are abusing the scheme.

“The UFU wants to see the ultimate roll-out of the full-inspection programme implemented as soon as possible,” Mr Aston continued.

“We have been calling for a full audit of all boilers for some time now. This would allow the vast majority of people who are using the scheme legitimately to clear their names and distance themselves from the unfair and sensationalised media coverage that has beset this issue since late 2016.”

A spokesperson for the Department for the Economy said temporary arrangements could be extended until March, 31 2019.

The spokesperson said: “The 2017 Regulations were never intended to settle the long term tariff arrangement for the boilers in question but were intended as a temporary measure to allow long term arrangements to be designed and introduced, to address fairly the fact that the original tariff was leading to excessive payments which were totally unaffordable for the public purse.

“The 2017 Regulations are currently subject to legal challenge,  with the Court hearing due at the beginning of October. The Department for the Economy must await the judgment of the Courts before proposing any such long term arrangements.”

The spokesman added: “The Department intends at the appropriate time and subject to the decision of the Courts in the present Judicial Review to propose to an incoming Minister that the 2017 Regulations should be extended for up to a further year until March, 31 2019 – this could only happen if the Minister agrees and obtains Assembly approval.

“It must be emphasised that this would be a further temporary measure which would give the Department the opportunity to develop the long term arrangements needed.”

Established in November 2012, the RHI scheme was an attempt to increase consumption of heat from renewable sources. It was found to have paid more to boiler owners than the cost of the fuel. Auditors said there may have been potential fraud in order for some owners to profit from the scheme.

The scandal ultimately led to the downfall of the Executive and the current political deadlock. An inquiry has been established in order to examine the detail of the scheme and how it was allowed to get so out of control. It is set to begin proceedings in the coming weeks.

 

[Source: Belfast Telegraph http://www.belfasttelegraph.co.uk/news/rhi-scandal/farmers-paying-cost-of-stormont-uncertainty-union-frustrated-over-rhi-cap-extension-plan-36090878.html]

Older posts