Renewable Heat Incentive Inquiry examining botched energy scheme
Former DETI official Seamus Hughes faces questions from inquiry counsel
Inquiry set up after public concern over scheme's huge projected overspend
Retired Court of Appeal judge Sir Patrick Coghlin chairing inquiry at Stormont
Public evidence sessions expected to last until well into 2018
This was the scene on the slopes of Stormont today, with youngsters sledding through the snow.
Mr Hughes will have to return another time for another question-and-answer session.
Image source, Press EyeInquiry chair sir Patrick Coghlin says we'll have to get the snow-ploughs tomorrow.
We're off to get the skis on, but we'll be back tomorrow morning for more from the inquiry from 09:45... weather permitting, of course!
BBC News Northern Ireland
There was no effective monitoring of the RHI scheme as it began to hit serious problems, the inquiry heard.
Image source, PacemakerThe civil servant who looked after the day-to-day running of the scheme in 2014 "didn't really understand" what was going on.
Seamus Hughes said he had not been told to monitor key things like technology types, boiler run times and sizes.
Ofgem's approach was that because the term 'heating system' was not defined in the RHI scheme regulations it was "up to the policy operators to interpret the position", explains Mr Aiken.
Sir Patrick observes that that was inviting "a little legal debate, wouldn't it?"
Image source, RHI InquiryHe asks Mr Hughes why he thought Ofgem's interpretation was wrong.
"My gut reaction was that it was wrong," he replies, adding that he was coming to it cold.
"You obviously didn't have five boilers!" jokes Dr MacLean.
Mr Hughes followed up Mr Hamilton's email with a query to Ofgem, the administrator for the RHI scheme.
It said the policy was that unless systems were hydraulically linked "we consider them separate plants", and it didn't matter that the boilers were heating the same space.
Image source, RHI InquiryMr Hughes tells the inquiry he found this "absolutely bizarre".
Ofgem said that was due to the fact that the term "heating system" was not correctly defined in the regulations for the scheme and could be open to interpretation.
It suggested that DETI might therefore want to amend the regulations.
Another man, David Hamilton, sent an email to DETI with a "theoretical" question about the RHI scheme.
He said a "large industrial building is in need of being heated" with 500kW thermal of heat, and suggested that the owner might install five small 99kW boilers rather than two large 250kW units.
He asked if the separate boilers would qualify for the higher tariff on offer for the smaller boilers or whether it would be considered a single system, therefore only receiving the lower subsidy.
Image source, Getty ImagesInstalling five small boilers would mean he could collect four times more money than if he put in two large units, and Mr Hamilton also asked if the potential claimant would be "asked why he installed five small boilers".
Mr Hughes tells the inquiry he viewed the queries as Mr Hamilton trying to tease out "what would be the most beneficial to him".
He replied to the email, saying that the suggested set-up would be considered as a single heating system, therefore falling under the lesser subsidy rate.
In September 2014, the Democratic Unionist Party MLA Jim Wells forwarded a letter to DETI from one of his constituents, Harry Baxter.
Mr Baxter called for the subsidy levels in the Northern Ireland RHI scheme to mirror those in the GB initiative.
As an "early adopter" of the scheme using a 199kW boiler at Castlewellan Castle in County Down, Mr Baxter felt he had been hard done by compared with those who were splitting their heating systems into 99kW boilers to claim a bigger tariff that was on offer for smaller units.
"We didn't try to play games with our installation and are now being punished for being genuine early adopters," he wrote.
As Mr Aiken points out, a participant with a large boiler would be getting 1.5p for each kWh of heat, while someone with two smaller boilers would get 12p.
Tiering as a cost control for the RHI scheme was a "safety feature" and not "like a fire-hose you pour on a roaring inferno", says Sir Patrick.
Image source, Getty"It's there before the fire starts," he adds.
Mr Hughes accepts that he didn't fully understand the potential for the scheme to run out of control due to a sharp increase in demand.
In response to Mr Hughes's email, Ms O'Hagan sent a frank reply, saying that it was "really disappointing" that tiering wasn't being considered for the RHI scheme, even though she had consistently made her concerns clear to DETI.
She said people were were trying to "save energy, money and environment have an uphill struggle against" the initiative that encouraging people to burn biomass " for profit".
Image source, Getty ImagesMr Hughes didn't reply - he says he should've done so and it was a "missed opportunity" to find out more information from Ms O'Hagan.
Sir Patrick suggests that DETI should've met her, like officials had done in October 2013 after she first pointed out the problems.
Mr Aiken asks "how worried should we all be" if officials across the civil service react to concerns raised by the public in the same way DETI staff did to the issues Ms O'Hagan raised.
"The world [was] about to change dramatically" regarding the RHI scheme in March 2015, observes Mr Aiken, as applications were constantly increasing.
Sir Patrick wants to know why DETI wasn't looking at tiered tariffs as a means of containing that rise.
Mr Hughes tells him that the scheme was still operating within its budget at the time.
Image source, RHI Inquiry"So, as long as the scheme was in budget the fact that it was demand-led and unpredictable and that in Great Britain both tiering... and digression had been brought in was not looked at?" Sir Patrick asks.
Mr Hughes says officials were starting to look at the scheme and "benchmark" it against the GB scheme.
"It can't be right to wait until you were virtually overwhelmed ," Sir Patrick observes.
The so-called whistleblower who tried to draw then then DETI minister Arlene Foster's attention to a key flaw in the RHI scheme kept following up her concerns with the department.
Janette O'Hagan (below), who gave evidence to the inquiry last month, pointed out time and time again that the overgenerous subsidy on offer meant people were needlessly producing heat to collect cash.
She knew that a cost control mechanism called tiering could prevent that - it works by reducing the subsidy rate on offer once a certain limit of heat production has been reached.
Image source, RHI InquiryIn March 2015, she emailed DETI to ask why nothing had been done to tackle the issue, and Mr Hughes told her that tiering wasn't being considered at the time but may be later.
That was even though Mr Hutchinson had said in his handover note 10 months earlier that the mechanism should be considered "as a matter of urgency" in order to "prevent excessive payments".
Mr Hughes tells the inquiry that it hadn't even been discussed within the department by that stage.
The response Ms O'Hagan received from Mr Hughes left her "raging", she told the inquiry.
After the lunch break, Mr Aiken turns to the matter of reviews of the RHI scheme, explaining that there were three types.
The first is a full scheme review promised in the 2012 business case for the initiative.
As far as Mr Hughes is concerned, that was never on the table, and Mr Aiken and Sir Patrick agree that it had "fallen off the radar" before Mr Hughes appeared on the scene.
Image source, RHI InquiryThe second type of review is the need for re-approval by the Department of Finance by March 2015.
No-one ever told Mr Hughes that was needed, nor had his predecessor Davina McCay been told.
The third type of review Mr Aiken describes as "bespoke", and he gives the example of the review of tariffs marked as "urgent" in Mr Hutchinson's handover document.
The inquiry rises for a break and will return at 14:00 - join us again then.
A register of risks associated with the RHI scheme had been drawn up in March 2012, but it had essentially been left on the shelf and never updated after its creation.
Mr Hughes says he was familiar with risk registers from his previous work in the civil service, but he had not been involved in reviewing them.
Image source, Getty ImagesInquiry panel member Dame Una O'Brien asks him when he first saw the RHI risk register.
"Just there now," he says.
It's fair to say that's followed by a brief stunned silence in the Senate chamber.
DETI had a statutory duty to publish statistics about the RHI scheme but that wasn't realised by the civil servants running the initiative.
But that never happened in the three-year lifetime of the scheme.
Image source, Getty ImagesMr Hughes says the issue was noticed in September 2014 and the intention was to address it but "events overtook things".
Mr Aiken explains that was a "serious" matter and the department could've faced and lost a legal challenge by not publishing the data.
By the end of 2014, the number of applications to the RHI scheme was rising steadily, with the uptake having been slow for much of its earlier lifetime.
Dr MacLean asks if there were "cheers going up in the office" as the numbers increased.
"We were thinking: 'This is now starting to work the way it was meant to work' - people were applying for it," replies Mr Hughes.
He accepts that he didn't understand that what was actually happening was that people were beginning to pile into the scheme because they saw how lucrative it was.
The lack of staff continuity after the overhaul earlier in the year was a contributing factor to that because no-one with experience of the scheme from its early days was left to notice dangerous trends.
DETI should have been closely monitoring the RHI scheme and the department was receiving regular reports from Ofgem.
Looking at some of the data, Mr Aiken points to scheme participants who were running their biomass boilers for far longer than the department had anticipated.
The subsidy on offer was based on an estimated running time of about 1,500 hours a year, but those big users were burning biomass for about 5,000 hours, allowing them to claim far money money than was intended.
Mr Hughes says he wasn't keeping an eye on that.
Mr Aiken puts it to the witness that none of the factors that could have indicated overcompensation, or gaming of the system, were being monitored by him or by anyone else at DETI.
The witness confirms that no-one raised the need for monitoring with him, and he wasn't go doing it.
Mr Hughes says he didn't check how long the RHI scheme's approval from Stormont's finance department would last for.
As it happened, the initiative needed reapproval in March 2015 - about two-and-a-half years after it opened - but DETI never sought that it the scheme ran on for several months before anyone noticed that the approval had elapsed.
Image source, Getty ImagesThere was nothing in the handover note that Mr Hughes was given that explained that reapproval should be sought - other more senior staff were told about it but they didn't pass the message on to him.
In the civil service's record-keeping system, the business case for the scheme and the original approval letter that followed it, which outlined the conditions of the approval, are not stored together.
Sir Patrick says he finds that "extraordinary" and "the logic of that defeats me entirely".
Prior to the DETI staffing shake-up on the RHI scheme in 2014, there had been a long-running saga concerning cost controls for the initiative.
The department had decided not to add the budget protection mechanisms introduced to the GB RHI scheme, instead preferring to develop its own interim control measure.
That was not communicated to Mr Hughes at the time he started working on the scheme.
Image source, Getty ImagesIn December 2014, DECC supplied Mr Hughes with a summary of regulatory changes made to the GB RHI scheme since its inception.
One of the headings included the word "digression" with reference to cost controls, and Mr Hughes says the word would have meant nothing to him at that time.
Digression, if you haven't been entirely glued to our coverage for the last few months, is a mechanism that allowed the subsidy on offer through the scheme to be lowered in response to increased demand, keeping the initiative's budget on course.
There were "a lot of twists and turns" in the RHI scheme but there was "very little opportunity" to discuss the nuances with people who had a greater understanding of it, says Mr Hughes.
Image source, Getty ImagesInquiry panellist Dr Keith MacClean wonders whether anyone told Mr Hughes about the complexity of the RHI scheme when he started working on it.
"I don't recall anybody actually saying to me it was a complicated scheme but it didn't take very long to work out it was," says the witness.
Mr Hughes accepts that his level of understanding of the RHI scheme and other energy projects that DETI was running was "close to zero", as suggested by the inquiry barrister.
The witness says he had no background in energy policy and the role was "totally new" to him.
Image source, Getty ImagesHe says the UK government's Department of Energy and Climate Change (DECC), which was running the Great Britain RHI scheme, was new to him too.
Reports by external consultants about key aspects of the scheme were "very, very complex... and they didn't make a lot of sense to me, to be perfectly honest, on initial reading".