Cutting the level of Renewable Heat Incentive payments “flew in the face of” all Stormont assurances, the High Court has heard.
Counsel representing a group of boiler owners insisted they signed up to the green energy scheme on the basis that tariff rates would be guaranteed for 20 years.
He also set out the financial burden facing farmers plunged heavily into debt by their investment, and claimed officials who ran the botched initiative had shown “crass incompetence”.
More than 500 members of the Renewable Heat Association NI Ltd are challenging the decision to reduce payments assured under the original 2012 regulations.
They argue there was no legal power for the move, and that a Stormont department must have known rates could not be altered retrospectively.
Under the scheme businesses and other non-domestic users were encouraged to move from using fossil fuels to renewable heating systems.
But with operators legitimately able to earn more cash the more fuel they burned, the cost to the public purse has been projected at up to £490m – a figure disputed by the association.
The debacle led to the collapse of Stormont’s power-sharing administration, and the establishment of a public inquiry chaired by retired judge Sir Patrick Coghlin.
Earlier this year former economy minister Simon Hamilton set out revised 2017 RHI Regulations as part of cost-cutting proposals.
Lawyers for the association contend this was an illegal step against boiler owners with 20-year contracts.
As part of a wider challenge they are seeking to have the move declared ultra vires, or beyond the department’s legal powers.
Opening the association’s application for judicial review, Gerald Simpson QC told Mr Justice Colton anyone who included in the 2012 regulations had their payment rates fixed for 20 years.
“There was a representation on the part of government that if you joined your tariff level would remain unchanged for the lifetime of accreditation,” he said.
“It’s precisely in breach of that, and a direct contradiction of that, that the 2017 regulations were promulgated.
“They have flown in the face of all government representations.”
A letter to banks in 2013 from the then enterprise minister, urging them to lend to businesses using the biomass boilers, was said to back the association’s case.
With subsidy levels described in the correspondence as “reliable and long-term”, the barrister claimed it amounted to a “cast-iron guarantee”.
Referring to press reports of alleged fraud and misuse surrounding the flawed scheme, he stressed available sanctions such as the stopping of payments and removal of accreditation.
“The department has always had, since 2012, this panoply of powers, but seems not to have used it,” he added.
During the hearing Mr Simpson referred to Treasury advice that it would not pay for any overspend in the scheme from central funds, with the money instead having to come from the Northern Ireland block grant.
Claiming this appeared to have been forgotten by Stormont officials involved with the initiative, the barrister described it as “crass incompetence”.
He emphasised how the Incentive was aimed at persuading businesses to replace existing “tried and trusted” heating systems with biomass installations.
The court heard how one poultry farmer took out a loan in excess of £300,000 on the understanding that his tariff would be fixed for 20 years.
In an affidavit the operator explained how he has always been an honest participant who now feels unfairly prejudiced and concerned about being able to pay back the bank.
“The financial burden undertaken by applicants for the scheme was very considerable,” Mr Simpson said.
The hearing continues.
[Source: UTV https://www.itv.com/news/utv/2017-10-04/crass-incompetence-shown-by-rhi-officials/]