Northern Ireland

RHI: Pellets maker shared tariff changes details

Image caption The Renewable Heat Incentive scheme is approximately £490m over budget

Northern Ireland's biggest wood pellets manufacturer has confirmed it shared information about proposed tariff changes in the RHI scheme months before they were officially announced.

Balcas, based in Ballinamallard, County Fermanagh, said there was "nothing sinister" in the move.

It was not aware the information it had received was confidential, it said.

The Renewable Heat Incentive scheme was intended to increase the creation of heat from renewable sources.

However, businesses were receiving more in subsidies than they were paying for renewable fuel and the scheme became majorly oversubscribed.

The fallout from the scandal surrounding the scheme, which is approximately £490m over budget, resulted in the collapse of Stormont's institutions and the calling of snap elections on 2 March.

'Significant impact'

Last week, the Permanent Secretary of the Department for the Economy Dr Andrew McCormick said there had been "premature information" released to the renewables industry about the planned changes.

He said it may have had a significant impact on the projected £490m overspend.

He revealed that officials within his own department may have been responsible for the release of the information.

The changes to the tariff structure were announced on 8 September 2015 and came into effect the following month.

But two months earlier a senior manager within Balcas sent a renewables firm a detailed email advising them of new information about the RHI scheme.

The manager said it had come, via another renewables firm, from a senior named official within the Department of Enterprise Trade and Investment (DETI).

The information included details of the likely timetable for amendments to the tariffs, the fact that reduced subsidies were proposed and that DETI had overspent on its budget because of usage in the poultry industry.

The manager wrote: "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 "sub 100KW" is a reference to the generating capacity of the boilers.

Any boiler up to 99 kilowatts attracted the most generous subsidy rate of 6.4p per kilowatt hour.

'Simply passing on'

The BBC asked Balcas a number of questions about the information it had received and circulated about changes to the scheme.

In a statement the company said it was "simply passing on" information from the department responsible for the administration of the scheme.

It said at the time the scheme was being "heavily promoted and advertised by DETI".

It underlined that "at no time" was the information it had been provided with "presented as confidential".

Balcas said there'd been extensive consultation both formal and informal by DETI before and after its introduction.

It said it had never been directly involved in these consultations but did have contact with installers and others in the industry to "keep abreast of the scheme's progress".

It added: "we understand that the information shared with Balcas may have been shared following some of these consultations with industry representatives. Again we would reiterate it was not positioned as confidential".

The company said that because of "serious errors" in the way the scheme was implemented in Northern Ireland there was a risk of potential abuse.

It said: "Such abuse goes against all we stand for as a company and is potentially damaging to the many proper and wholly legitimate users."

'Investigation ongoing'

A spokesperson for the Department for the Economy said:

"The Department has instigated an independent fact-finding investigation to examine the management and control of the RHI scheme by Departmental officials.

This could lead to disciplinary action if the evidence points to issues of possible misconduct.

That investigation, being carried out by PWC is ongoing and therefore it would not be appropriate to comment on any disciplinary issues until the investigation process is complete.

This approach has been explained to the PAC on three separate occasions."

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