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Summary

  1. Renewable Heat Incentive Inquiry examining botched energy scheme
  2. Keith Avis and Marcus Porter of scheme adminstrator Ofgem give evidence
  3. Inquiry set up after public concern over scheme's huge projected overspend
  4. Retired Court of Appeal judge Sir Patrick Coghlin chairing inquiry at Stormont
  5. Public evidence sessions expected to last until well into 2018

Live Reporting

By Robin Sheeran and Iain McDowell

All times stated are UK

  1. That's all for today...

    The RHI Inquiry

    It's been a long day at the inquiry and there are no complaints in the Senate chamber when time is called for this evening.

    Join us tomorrow morning at 09:45 for more live coverage, with Mr Porter due to conclude his evidence first thing.

    Have a great evening...

  2. What happened today at the RHI Inquiry?

    BBC News Northern Ireland

    There were differing versions of the minutes of a teleconference in which DETI was warned of the risks of the RHI scheme, the inquiry heard.

    The Senate chamber

    A lawyer for Ofgem, the body paid to run the scheme, wanted the dangers of proceeding without a key cost control "hammered home" in the record of the meeting.

    But the wording on the issue was "watered down" by another Ofgem employee, the inquiry was told.

  3. Commissioner raising evidence concerns as 'matter of urgency'

    View more on twitter

    Away from the Senate chamber, the evidence given to the inquiry yesterday by the head of the Norther Ireland Civil Service has turned into a hot topic in the political sphere and beyond.

    David Sterling told the inquiry that meetings between Stormont ministers and their staff were sometimes not minuted in order to frustrate freedom of information requests.

    He said the DUP and Sinn Féin were sensitive to criticism, and it was therefore "safer" for meetings involving their ministers not to be recorded in case the details were later released to the public.

    View more on twitter

    On The Stephen Nolan Show on BBC Radio Ulster this morning, MLAs had their say on Mr Sterling's evidence, and what it meant for governance in Northern Ireland.

    The SDLP's Mark H Durkan said the revelation "would make people wonder if they're in Northern Ireland or North Korea", and it "shows what a deep crisis we are actually in", according to the Ulster Unionist Steve Aiken.

    The Information Commissioner's Office, the body that upholds the public's right to information, has said it is aware of Mr Sterling's comments and will be contacting him "to raise our concerns as a matter of urgency".

  4. 'Part of our obligation to tell DETI of scheme problems'

    The line of questioning turns to the transference of the provisions and powers for administering the RHI scheme from DETI to Ofgem.

    Marcus Porter

    Mr Porter is asked if it was part of Ofgem's role to tell DETI of any problems that arose in the scheme that would have not been immediately apparent.

    "I think its part and parcel of our obligation as a government department administering a scheme in conjunction with another government department," replies Mr Porter.

  5. 'Why not tell DETI to consider cost control method?'

    An internal Ofgem document was drawn up in 2012 to examine the "key differences" between the regulations for the GB RHI scheme and the NI initiative.

    It identified that there were "significant" differences between the subsidies on offer through the two schemes.

    It said the lack of tiering left the NI scheme open to "gaming", which was the installation of several smaller boilers rather than a single larger boiler in order to obtain a higher tariff that was on offer for smaller heating systems.

    Coins

    Mr Porter agrees that Ofgem's experience would've told it that without tiering there was an increased risk of the scheme being abused.

    Asked if it would have therefore been a "good idea" for Ofgem to tell DETI that it should have considered adding tiering, he says the department should have already been aware of it because "it's not that difficult a point".

    He adds: "It would certainly have been useful; it would certainly have been helpful, knowing what we now know."

  6. 'Absence of cost control should've been patently obvious'

    The absence of tiering in the draft regulations for the RHI scheme should've been viewed by Ofgem in 2012 as "potentially significant problem", suggests Mr Aiken.

    Mr Porter, who reviewed the regulations from his legal perspective, says he didn't view it as such at the time, adding that he believed that DETI "knew what they were doing" in leaving it out of the scheme.

    A mangifying glass

    Inquiry chair Sir Patrick Coghlin says it should been "patently obvious" to the witness that the "apparent omission" of tiering was a concern.

    Sir Patrick says that if he'd been in Mr Porter's position he would "need a very strong explanation as why" tiering was not included.

    "Hindsight's a great thing," says Mr Porter, to which Sir Patrick bites back: "No, it's not hindsight."

  7. 'Cost control method reduces likelihood of abuse'

    A key question in the debacle of the RHI scheme is why there was no tiering system in place for the subsidies on offer through the initiative.

    Tiering is an important way of controlling the cost of the scheme - it works by reducing the tariff on offer to a scheme claimant once a certain limit of usage has been reached.

    Wood pellets

    The issue of tiering is mentioned in internal Ofgem documents from 2012, with staff member Oliver More saying that it was a "good way of reducing the incentive to waste heat in the scheme".

    "Taking it out increases the likelihood of abuse and heat wastage," he added.

    Tiering was included in the update to the GB RHI scheme, and Mr More explained that without the mechanism the NI initiative was at greater risk of abuse and wasting of heat.

  8. 'Postponing work could've had dire consequences for DETI'

    Mr Porter did his best to have his warning raised with the board of the Gas and Electricity Markets Authority (GEMA) - the ultimate controlling body of Ofgem - but it ever happened.

    Sir Patrick lays out the situation as he understands it: "This witness tried to get across a clear, well-formed legal warning - that was rejected ultimately."

    If the warning had been taken up by the GEMA board it could have been transmitted to Ms Hepper at DETI, or as Mr Aiken puts it, direct to the minister.

    Dame Una O'Brien

    Mr Aiken says Ofgem could have refused to take on the job of administering the RHI scheme until after the necessary changes had been made to the initiative's regulations, as he had insisted.

    "It would have had pretty dire consequences for DETI," Mr Porter says, adding that there was no other body but Ofgem to administer the scheme.

    Asked by inquiry panellist Dame Una O'Brien why his superiors did not raise the matter with the GEMA board, he says he doesn't know, and adds: "You have to bear in mind that there is a hierarchy and... and there were plenty of [other lawyers] above me."

  9. 'DETI proceeded with scheme against legal advice'

    So, a quick recap...

    Ofgem lawyer Mr Porter had serious concerns in the summer of 2012 that DETI intended to open its RHI scheme without making crucial changes that would've protected its budget.

    He advised that DETI should make changes to the scheme's regulations that would tighten it up and prevent "knotty legal issues" from arising.

    Arlene Foster

    Internal Ofgem emails show that he believed that if DETI went ahead with its plan, it would be "knowingly reproducing legislation in relation to which there is considerable scope for improvement".

    Mr Porter's warning went to DETI's energy boss, who claims that she explained it to the department's minister Arlene Foster.

    In her written evidence to the inquiry, Mrs Foster says she has "no recollection of being clearly informed about the risks" of opening the scheme without cost controls, adding: "If this issue was raised to me I believe that Ofgem’s warnings must have been significantly downplayed."

    Ultimately, DETI decided to plough on with the scheme regardless of the warning from Ofgem.

  10. Witness Marcus Porter returns to give evidence

    Ofgem legal adviser Marcus Porter is the witness for this afternoon.

    He was in the inquiry hotseat back in January, and given the number of mentions his name had this morning his ears must be burning.

    Marcus Porter

    By this stage in the proceedings, Mr Porter has become known for expressing disquiet about DETI's determination to press ahead with its RHI scheme without adopting the recommended changes that had been made to the similar initiative in Great Britain.

    The inquiry's junior counsel Joseph Aiken is your question-master for this session.

  11. 'Working with DETI to set up scheme was no easy task'

    Reflecting on Mr Heigl's criticisms, Mr Avis acknowledges that Ofgem's development on the RHI scheme "wasn't an easy task".

    "It was quite a taxing process for all concerned - for ourselves, DETI, legal, whatever," he adds.

    Keith Avis

    He blames a "general raft of issues", including "time pressure" that DETI put on the administrator to get the scheme opened as quickly as possible.

    That concludes Mr Avis's evidence - he's free to go and the inquiry breaks for lunch, so we'll be back at 14:00.

  12. 'DETI's lackadaisical attitude would come back to haunt us'

    Ofgem produced a lessons learned report after the development phase of the RHI scheme, which allowed staff to give "openness and frankness" in their views of how the project gone.

    One staff member, Paul Heigl, who worked under Mr Avis, gave a long list of concerns, saying that Ofgem had known of the "systemic problems... before we even started the project, which placed immovable barriers in our way".

    Burning wood pellets

    He accused senior managers of making "unofficial agreements without telling the project team", which caused "significant problems with delivery" and "almost ruined all our hard work at stakeholder engagement and trust-building".

    He also said managers had agreed "costs that were unrealistic" with DETI and should have known that areas that the department was "being lackadaisical about" would "come back to haunt us".

    Mr Heigl also pointed out that resources were far short of what the Ofgem team needed and "frankly sets us up for failure", and said that it was "absurd" that they didn't work closely with those who had developed the GB RHI scheme.

  13. 'Scheme risk workshop was never held'

    Mr Scoffield turns to the subject of risk assessment in the RHI scheme.

    In Ofgem's RHI feasibility study of late 2011 it was proposed that a "risk workshop" be held in the early development stage of the project.

    A folder marker: Risk management

    But Mr Avis says he is "not aware of a risk workshop being held", adding that he's "not 100% sure" why it never took place.

    He says there was a risk register, an issues log and checkpoint meetings in the development phase.

  14. 'Was 'crazy idea' to cut costs ever pursued?'

    Inquiry counsel Mr Scoffield wonders why it was "even under consideration" that some applications to the RHI scheme could have been approved without being properly checked.

    Mr Avis says it was understood by Ofgem that it was a "high risk" option to save money.

    Pound coins

    Mr Scoffield asks if it was a "serious suggestion" or "did anyone say: 'This is a crazy idea, we could never do that?"

    The witness tells the inquiry that he can't remember it being dismissed in such a way but he believes it was not pursued beyond just being a suggestion.

  15. 'Money could be saved by cutting boiler checks'

    Documents the inquiry has obtained from Ofgem appear to suggest that the administrator had growing concerns in summer and autumn 2012 that the quote it had given DETI for the running costs of the RHI scheme would fall short of the actual total.

    Internal emails show that Ofgem was worried that it might not have enough money to do everything it wanted to in relation to the scheme, and there could therefore have to be a trade-off between the things that it could afford to do.

    A biomass boiler

    One option that was being considered was "minimising" the number of checks of applications to the scheme.

    Internally, Ofgem said it could take a "higher risk approach" by accepting applications to the scheme as being correct and eligible and later checking one in 10 of them.

    It accepted that that could lead to applications "incorrectly being approved".

  16. 'Potentially significant impact of change to minutes'

    DETI was given the "watered down" version of the June 2012 teleconference minutes and did not receive the copy that contained Mr Porter's original, more forthright legal advice.

    Mr Scoffield says the change therefore "might potentially be significant" because DETI officials who may have read the minutes but were not involved in the actual teleconference would not have known how serious the legal risk to the RHI scheme was.

    People on a telconference

    Mr Avis says that Ofgem lawyer Mr Porter was ultimately "happy for the minutes to go out".

    "It wasn't the case that we were riding roughshod over him," he adds.

  17. 'How can changes to legal advice in minutes be justified?'

    Inquiry chair Sir Patrick says Mr Avis's actions in changing the minutes and converting "clear legal opinion" into "much less strong language" was done to "preserve your contractual, financial relationship with another government department".

    He asks: "How can that be justified... if you are a professional body responsible for holding standards?"

    Keith Avis

    "I take your point," responds Mr Avis.

    He accepts that he was "probably" being overcautious, but adds that he went to his manager for his opinion, who ultimately approved that the changes would be made.

  18. 'Why was strength of meeting minutes watered down?'

    Asked by the inquiry barrister if his version of the minutes from the teleconference was "watered down", Mr Avis says he believes it is "still making the point".

    He explains that the reason behind his caution was that he didn't want to appear critical of DECC by using the term "deficiencies" in relation to its GB RHI scheme, because Ofgem was also administering the GB initiative.

    Inquiry chair Sir Patrick Coghlin wants to know why the "strength" of Ofgem's legal view was "removed".

    Sir Patrick Coghlin

    Mr Avis says he "had concerns about that, rightly or wrongly" that it "might be compromising [Ofgem's] position" and its "relationship" with DECC.

    Inquiry panellist Dame Una O'Brien says her vast experience of working in the civil service is that there "isn't any rule that says you can't say that other regulations are deficient".

    Sir Patrick adds: "You have changed the wording chosen by a professional lawyer... because you're worried about offending a GB government department."

  19. 'Two competing versions of meeting minutes'

    There were two competing accounts of the teleconference between Ofgem officials and their counterparts at DETI, in which the department was warned about the legal risks of proceeding with the RHI scheme without making the crucial changes to its regulations.

    Ofgem lawyer Mr Porter wanted it "hammered home" that he had significant concerns about DETI's preferred course of action.

    A boardroom

    He said there would be "legal risks and administrative difficulties arising from the deficiencies" in the GB scheme's original, unamended regulations, on which the NI RHI scheme was broadly based.

    In an email exchange with his boss at Ofgem, Mr Avis said he would "revisit the text of the minutes" to capture Mr Porter's "clear recommendation" to DETI but "without overplaying the point on deficiencies" of the GB scheme's regulations.

    As a result, Mr Porter's use of the term "legal risks and administrative difficulties arising from the deficiencies" of the GB scheme's regulations was changed to "logistical and presentational issues".

  20. 'Was Ofgem divided over legal objection?'

    DETI official Mr Hutchinson's view of the June 2012 telephone conference, as recorded in his evidence to the inquiry, is that Ofgem's Mr Porter made his opinion on the regulations clear from a legal perspective

    However, Mr Hutchinson said "I think the administrative side of Ofgem maybe saw our viewpoint."

    Mr Scoffield asks a question

    Mr Scoffield is interested in this suggestion that there was a divergence of opinion in the Ofgem team between the lawyers and the policy people.

    Mr Avis says he can't remember the details of the meeting, but it seems "pretty clear" to him from looking at the minutes that there is no evidence that Ofgem's policy team objected to any points made by Mr Porter.