Northern Ireland

RHI scandal: Cost cutting plan would be 'catastrophic' for businesses

Wood pellet fire
Image caption Northern Ireland ministers are trying to claw back some of the £490m overspend on the botched Renewable Heat Incentive (RHI) scheme

An organisation representing 100 renewable heating businesses has said a plan to cut costs associated with the RHI scheme would be "catastrophic".

The Renewable Heat Association (RHA) for Northern Ireland is also considering legal action.

Northern Ireland ministers are trying to claw back some of the £490m overspend on the botched Renewable Heat Incentive (RHI) scheme.

The economy minister will bring the plan to the assembly on Monday.

Simon Hamilton has produced amended legislation which would reduce tariffs paid to about 1,800 people who got into the RHI scheme before November 2015. The minister's plan requires a vote by MLAs.

Image caption Michael Doran said people who are operating the scheme properly should not be "hammered'

However, there is an acceptance that any move to reduce tariffs could face a legal challenge.

The RHA, which represents businesses who signed up to the scheme, is promising just that. On Sunday, it plans to send out a letter to all 108 MLAs setting out its opposition.

RHA spokesman, Michael Doran, called for "a reasonable solution to this as soon as possible".

"We want to see audits, we want to see technical audits, we want to see business audits. If anybody fails those audits and is found to be acting fraudulently, throw them out of the scheme, prosecute them," he said.

"But don't hammer the people who are operating the scheme properly."

Image caption Dr Capper said the problem centred on taking away people's vested rights

However, an expert in contract law from Queen's University, Belfast, said amendments passed by legislation could be legal.

"There would be no difficulty at all if they could prove people were extracting payments from the Department of Enterprise, Trade and Industry (Deti) without actually complying with the scheme," said Dr David Capper, reader of law.

"It's where the assembly tries to take away people's vested rights that they have a problem. They can do so, provided they act proportionately."

Existing regulations

The RHI scheme has been criticised for its lack of cost controls and for over-generous subsidies which were greater than the cost of renewable fuel.

It led to claims the scheme was open to abuse because the more fuel applicants burned, the more they earned.

A whistleblower alleged that previously unheated factories had installed boilers with the intention of running them throughout the year to collect about £1.5m in RHI payments over 20 years.

However, Dr Capper said existing regulations governing the scheme may provide a legal way for dealing with those who have abused the system.

He told the BBC's On Your Behalf programme that an article applying to businesses using the scheme expressly forbids generating heat to make money.

"You're not, strictly speaking, entitled to burn just as much as you want to earn as much as you can get.

"There is a condition in the regulations, which would be a condition in the contract itself, that you mustn't generate heat for the predominant purpose of increasing your periodic support payments."

The DUP has refused to comment on the issues raised.

So far the legislation has not been approved by Sinn Féin Finance Minister Máirtín Ó Muilleoir.

It is understood officials in his department are assessing the plan over the weekend.

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