Cutting payments in Northern Ireland’s botched Renewable Heat Incentive scheme was essential to stop public money “haemorrhaging” for at least a decade, the High Court in Belfast has heard.
Counsel for a Stormont’s Economy Department argued that reduced tariffs were introduced to remedy a “catastrophic error” in the green energy initiative.
He also insisted the scheme was never meant to subsidise poultry farming and mushroom growing industries.
More than 500 members of the Renewable Heat Association NI Ltd are challenging the decision to reduce payments assured under the original 2012 regulations, which they claim was an unlawful step taken by the department.
The scheme was set up to encourage businesses and other non-domestic users to move to renewable heating systems. With operators legitimately able to earn more cash by burning more fuel, the cost of the overspend has been projected at up to £490 million - a figure disputed by the association, which says it could be as low as £60 million.
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 RHI regulations as part of cost-cutting proposals.
Illegal step
Lawyers for the association contend this was an illegal step against boiler owners with cast-iron 20-year contracts. They allege that the whole scheme was let down by incompetence, hopeless oversight and failed opportunities to impose cost controls.
Responding for the department on day three of the hearing in Belfast, Tony McGleenan QC said the case was not finding fault. He accepted criticisms levelled by the association’s legal team, and told the court there had been “a fundamental, catastrophic error” in the scheme’s design.
Central to his case, however, was the public interest in introducing new tariffs.
“Obviously mistakes have been made, but it would be improper for the department, the Assembly and the Executive to allow those mistakes to continue and have repercussive financial implications for another decade or more.”
The barrister agreed with submissions that cost control problems should have been spotted and addressed earlier than 2015. But he claimed arguments advanced by the association’s senior counsel, Gerald Simpson QC, actually strengthened the case for amending the regulations.
“What Mr Simpson has exposed is the imperative need to introduce cost control measures, stop the haemorrhaging of public money and ensure that the scheme operates in the manner which the European Commission gave approval for in the first instance,” he told the court.
The hearing resumes on Wednesday.