Civil servants in leaked RHI emails are named

The two civil servants who '“ according to leaked documents '“ revealed in advance to figures in the renewable energy industry that the lucrative RHI scheme was to end can today be named by the News Letter.

By The Newsroom
Thursday, 26th January 2017, 8:50 am
Updated Thursday, 26th January 2017, 10:13 am
The RHI scheme could cost taxpayers as much as £490 million over 20 years
The RHI scheme could cost taxpayers as much as £490 million over 20 years

The names are contained within emails between businesses in July 2015 which have been leaked to this newspaper.

The emails seem to suggest that some firms – one of which was the major wood pellet supplier Balcas – were aware that the scheme without cost controls was ending, and were discussing how to get boilers installed quickly before it was closed.

Delays – which are alleged to have been the result of pressure from at least one DUP special advis0r – in introducing controls meant that the loopholes were ultimately not closed until November 18 2015. In a period of about two months almost as many applications were received as had been made in the previous almost three years of the scheme.

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However, the emails obtained by the News Letter suggest that even if the scheme had been closed the previous month, as originally intended, there might still have been a spike in applications if, as the emails suggest, information was circulating outside of the department in early July.

Neither the department nor the officials have commented on whether these third party accounts of alleged meetings are accurate. Nor have they commented on whether any such meetings were approved by more senior departmental officials. And even if so, it is not suggested that the officials acted improperly or realised the implications of what they were doing.

The News Letter approached the Department for the Economy about the situation last Thursday and have been asking questions since then.

The department said that the names should not be published, claiming that to do so would be “an interference with [the officials’] rights to privacy” and “strongly contrary both to the public interest” and their “rights and interests”.

The two individuals named in the emails are Stuart Wightman, who was head of the Energy Efficiency Branch within the then Department of Enterprise, Trade and Investment (DETI) and Seamus Hughes, who worked under him in that part of the department.

One of the emails – sent from a manager in Balcas to CMG Renewables in Cookstown on July 1 2015 – contained detailed information about what was going to happen, including the October date for the introduction of cost controls.

The email began: “Update from Stuart Whitman (sic), Renewable Heat DETI via Alternative Heat, Fergal Hegarty with regard an update on the proposed changes to RHI tariffs in NI as part of phase II of the scheme”.

This could suggest that Mr Hegarty – who works for Alternative Heat in Castlewellan – received the information from the officials and then communicated it to Balcas. The News Letter has repeatedly attempted to speak to Mr Hegarty, contacting his firm by phone and sending him an email, but he has not responded.

Mr Hegarty had until about two months prior to that date been project manager on the RHI management service, run by Action Renewables, a charity set up by DETI more than a decade ago, which is now known to have processed about a quarter of all RHI applications.

The Balcas email said: “Stuart has also indicated that DETI are proposing to introduce a two-tiered tariff for all tariff bands, in line with what is in place in GB.

“Stuart indicated that in the last seven-eight months DETI have overspent on their budget and the reason for this is the operating hours of the boilers in the poultry sector, hence the planned introduction of tier 1 and tier 2 tarrifs.

“This change will only affect new applications after the change comes into force so if any of your clients are considering installing biomass systems we would advise they should move asap to avoid missing out on the best rates from RHI, especially sub 100kW installations.”

The email went on to mention that “degression” – another form of cost control – was also likely to be on its way, “primarily as a means of budget control”. And it stated that DETI “are likely to overspend on their budget this year”.

The email concluded: “Again, this is just the latest developments (sic) with regard to what DETI are proposing and where they have got to in their consultations to date.”

A second email, sent 22 days later from a sales executive in DCI Energy to a colleague and to another individual whose company is unclear because it was sent to his private email address, again mentioned Mr Wightman.

The DCI Energy email actually forwarded on another email although the author’s name was not included. That forwarded email said: “I had a 2hr meeting with Seamus Hughes and Stuart Whiteman [sic] yesterday (DETI). Please see below a summary of meeting with regard imminent changes to NIRHI for biomass”.

It contained detailed information on the level at which the cap would be set (1,314 hours per year) and the tariffs for each tier (Tier 1 at 6.4p/kWh and Tier 2 at 1.5p/kWh) and said that the “implementation date mentioned several times was 5th October. This could slip to end of October depending on how long it take (sic) the minister to approve DETI’s proposal, however there is a risk on banking on this, I would expect”.

In a list of bullet points, it went on to say: “Grace period not likely – will just leave RHI open to further exploitation (poultry sector).”

The unknown author was advising the recipient to attempt to get in quickly before the cost controls by saying: “3-4 [seemingly a word missing, but referring to a period of time] lead time on ordering boilers and kit, if you think you [sic] get more boilers in before October then best to get onto [named individual]”.

And – in an indication of the individual’s confidence that they would be able to obtain future inside information before it was made public – the email added: “Will let you know when DETI make final confirmation, I should know before public announcement”.

At the end of the DCI Energy email (ie. beneath the forwarded email), the sales executive then wrote: “I also spoke to Seamus in DETI this morning who told me pretty much of (sic) what is written above. Final figures are yet to be confirmed but this seems to be what’s (sic) going to change to.”

The sales executive who wrote the email no longer works for DCI Energy and the News Letter has been unable to contact him. However, we spoke to the London-based financial director of the company who said that he had no knowledge of the information. He said that his firm had got out of the sector at the point when the RHI scheme ended.

The News Letter asked the department to send five questions to the two officials.

Initially, the department declined to say that it had sent the questions to the two officials.

However, on Tuesday it confirmed that both individuals were aware of the questions.

In an initial statement last Friday, the department said: “Any and all allegations regarding officials received by the department are being considered as part of the ongoing fact finding investigation which was commissioned by the department into the management of the RHI scheme. The PAC also continues to conduct its separate investigation into the matter.

“The information referred to by the permanent secretary at the PAC hearing is included in both of those investigations. It would therefore not be appropriate for officials who were involved with this scheme or the department to comment.

“This is in line with Department of Finance guidance and the general principle that no comment should be made until all matters are fully considered and the investigatory processes are complete.”

The department also issued a second statement asking the News Letter not to name the officials, arguing that the emails had been factored into the current ‘fact-finding exercise’ “which could lead to disciplinary action against some individuals”.

And it argued: “In relation to the public interest, as in the Shoesmith case, adverse comment in the public domain could prejudice any formal HR disciplinary process. The department is determined to ensure due process is followed as these matters are investigated.”

It added that “publication of the names could be highly prejudicial to the individuals as they have the right to expect that the investigative process, and any subsequent HR process, will be conducted fairly” and claimed that it would be “an interference with their rights to privacy”.

Then, following further questions from the News Letter which queried the department’s reasoning, it said late on Tuesday that publication of the names would be “strongly contrary both to the public interest” and their “rights and interests”.

The department did confirm that the officials are aware of the inquiry but said that “as these matters are part of an ongoing confidential fact-finding investigation they are bound by confidentiality and are unable to discuss anything relating to the case outside the investigation process”.

In a statement, Balcas told the News Letter that it was “never consulted by any NI government department in relation to the NI RHI scheme, nor are we aware of any direct communication to our company from them”.

When asked if it had passed the news that the lucrative RHI tariffs were to end around the industry, it replied: “Balcas is one of the leading suppliers of wood pellet fuel in the UK and Ireland. It can only be expected that we would stay abreast of developments relating to renewable energy and any changes that may affect it, and that any non-confidential information would be shared with customers and installers.

“Dr Andrew McCormick has already indicated in his evidence to the PAC, that it was his department that was the source of that information. At no time was the information presented to Balcas as confidential.”

It also said that it was not aware of “any other such exchanges” where departmental information was passed on to it via Mr Hegarty.

And Balcas highlighted that “at the time of this email exchange, DETI was a positive advertiser of the value of the renewable heat incentive. In so far as the industry were aware, this was a scheme being heavily, and positively promoted by government”.