Northern Ireland

Legal challenge to RHI payment cuts set for a new hearing on cost of flawed scheme over a single year

A legal challenge to cuts in Renewable Heat Incentive payments could be set for a new hearing focused on the cost of the flawed scheme over just one year
A legal challenge to cuts in Renewable Heat Incentive payments could be set for a new hearing focused on the cost of the flawed scheme over just one year

A LEGAL challenge to cuts in Renewable Heat Incentive payments could be set for a new hearing focused on the cost of the flawed scheme over just one year.

Boiler owners lost their original case when a judge ruled that reducing the tariffs had been a lawful step to prevent a potential £700 million overspend in a 20-year period.

An attempt to overturn that verdict was due before the Court of Appeal in Belfast today.

But proceedings were put on hold after senior judges pointed out the cost to the public purse from payment regulations limited to a 12-month period was not fully known or explored at the original hearing.

Lord Chief Justice Sir Declan Morgan said: "All we can look at is 2017; whatever balancing exercise is to be conducted it is to be conducted in relation to that year."

Lawyers will return to court October 8, when the issue of remitting the case for a fresh hearing on the legal point may be debated.

More than 500 members of the Renewable Heat Association NI Ltd are challenging the Department of the Economy for cutting their tariff rates.

They claim it was an unlawful step taken against operators with a cast-iron 20 year guaranteed rate of return on their investments.

Set up to encourage businesses and other non-domestic users to move to green energy 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 was projected at up to £490m - a figure disputed by the Association.

According to its lawyers the overspend could end up being as low as £60m.

However, the Department countered that 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 chaired by retired judge Sir Patrick Coghlin.

Last year former Economy Minister Simon Hamilton set out revised 2017 RHI Regulations at the centre of the legal challenge.

The Association's lawyers claim the reduced rates was an unlawful move against boiler owners who had payments guaranteed for 20 years.

But the Department insists it had legal authority to bring in revised tariffs essential to stop public money "haemorrhaging" for at least a decade.

In December, a High Court judge ruled that introducing the capped tariffs did not represent an abuse of power and there was a compelling case for the reduced payments.

At that stage, however, the exact costs of the 2017 regulations were still unknown.

Sir Declan suggested that the case may be restricted to examining issues of fairness and balancing competing interests over that 12-month period.