Belfast Telegraph

RHI scandal: £2.5m cost of suspected fraud in just one case

Exclusive: Regulator investigates three potential boiler swindles as Hamilton gets ready to name bulk of recipients, while court issues injunction to prevent the identification of others

By Claire O'Boyle

Energy watchdog Ofgem is investigating a suspected fraud case worth up to £2.5m in the 'cash for ash' scandal, the Belfast Telegraph can reveal.

The regulator has been probing three cases of potential fraud relating to the controversial Renewable Heat Incentive (RHI) scheme since October.

With values ranging from £48,000 to £350,000, and even a staggering £2.5m in potentially fraudulent claims, the fallout from the flawed programme continues as Economy Minister Simon Hamilton is expected to finally reveal the majority of the names of RHI recipients today.

Estimates suggest it would take four biomass boilers being run for almost 24 hours a day for 20 years to be worth £2.5m.

Responding to a Freedom of Information request by this newspaper, Ofgem revealed the three ongoing investigations are centred around installations which appeared to operate in ways not eligible under the regulations of the botched scheme, which is expected to cost taxpayers as much as £490m over 20 years.

It is unclear if payments to those three claimants have been halted as investigations continue.

The watchdog said that, depending on the nature of the investigation, payments may be suspended, but added it could not comment on individual cases.

It said: "Ofgem has a zero tolerance approach to fraud. We have a dedicated counter fraud team who work to prevent, deter and detect fraud across the environmental or social programmes we administer on behalf of the Government."

The watchdog, which was paid £1.5m to run the project when it took over in 2014, also said it had rejected 20 applications.

In October the regulator told Stormont's Public Accounts Committee (PAC) just 12 RHI applicants had been turned down for the lucrative scheme, which was forking out £1.60 for every pound spent.

According to Ofgem, the rejections were based on a number of factors, including that the applicant couldn't prove non-single domestic premises status, or that woodchip drying took place on a commercial basis.

Other reasons applications failed included that the cost of buying or fitting the installation was publicly funded, or that the applicant couldn't satisfy eligibility criteria.

The 20 rejected applications, with at least one turned down as recently as this month, were located in mainly rural areas.

The regulator also revealed that seven applications were withdrawn from the scheme.

This figure was much lower than the number indicated at the October meeting with the PAC, when an Ofgem official said a total of 59 applicants or potential applicants did not participate in the scheme, either through rejection or withdrawal.

The watchdog said those who withdrew between 2013 and 2015 included companies which had moved from where its boilers were installed, and claimants who had decommissioned their boiler due to inefficiency, or replaced their boiler.

According to reports earlier this month, Ofgem suspended payments in relation to more than half the installations it had inspected.

The watchdog said it had examined 63, and halted payments on 33 for a number of reasons, including technical issues. Of those, money from four was recovered, and in five cases payments were resumed. In the remaining 24 instances, investigations were ongoing.

Last week the PSNI said it was considering a request to investigate as many as 14 suspected cases of fraud.

The RHI scheme was set up in 2012 while former First Minister Arlene Foster was Minister for Enterprise.

Initially, the scheme was designed to encourage the installation of pricey eco-friendly boilers with the incentive of a tariff to be paid per kilowatt of heat burned over 20 years.

The flaw came when the Northern Ireland programme failed to put a cap on payments as its equivalent in Britain had done, effectively making it possible for businesses to make money by simply burning fuel, whether it was needed or not.

In the first 34 months of the scheme, 923 applications were made.

But after flaws were identified in the summer of 2015 and officials indicated caps would be put in place, a huge spike of 881 applications were made under the existing tariff system before officials finally took control that November.

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