RHI boiler owners in new legal bid to challenge cuts in payments

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 £700m overspend in a 20-year period.

The RHI controversy led to the collapse of Stormont last year

The RHI controversy led to the collapse of Stormont last year

An attempt to overturn that verdict was set to get under way at the Court of Appeal in Belfast on Tuesday.

But proceedings were put on hold after senior judges pointed out that 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 next month, 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 £490 million – a figure disputed by the Association.

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

However, the department responded by claiming 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 an ongoing 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 countered that 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 identified a clash between the private interests of the boiler owners and the public interest asserted by the department.

He ruled that introducing the capped tariffs did not represent an abuse of power, and concluded there was a compelling case for the reduced payments.

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

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

Adjourning proceedings until October 8, he added: “This is going to take a little time.”