The Opposition has questioned why legislation to create an Energy Commission was drafted before the Government's official policy on the matter was issued.

Yesterday the Energy Act 2009, which will establish an Energy Commission responsible for regulating energy costs, as well as licensing the sale of electricity, was passed by MPs in the House of Assembly.

The bill, introduced by Energy Minister Terry Lister, comes after the Government issued the Energy Green Paper in February, which Mr. Lister called the framework for creating Bermuda's energy plan. It is expected that the Energy White Paper will be released later in the year but in the meantime the Minister has tabled legislation to create a commission, something that has the Opposition concerned.

Mr. Lister explained it was important to move forward on the issue and not wait until the next legislative session to table a White Paper and then create a commission.

He said the commission could begin to look at issues such as pricing and explained the new legislation combined two currently existing Acts.

As the sole provider of electricity on the Island, Belco's prices are currently regulated through the Price Commission Act 1974 by the Price Commission, which lies under the Ministry of Finance. The new commission would take over regulation of Belco's prices, along with that of any future electricity providers, under the Ministry of Energy.

In the House of Assembly yesterday Mr. Lister said: "What we have done is taken it away from the Price Commission Act and put it under this new act. While the Price Commission Act has value, it is limited in scope and does not include some of the key elements required to regulate the energy industry. We have created the Energy Act 2009 by adapting the Price Commission Act and adding those provisions from the Telecommunications Act which are most relevant."

But Opposition MP Charlie Swan said: "I want to support them but it is difficult in this case. I believe we are on the right track but I find this is putting the cart in front of the horse. I believe a lot more can be done before we bring this legislation."

And Opposition MP John Barritt said he believed the Energy Act had been hastily drafted and there were some serious omissions such as ensuring a company's competitive interests are protected when they are in discussions with the Commission. He also raised concerns that the Commission would report to the Minster but there was no requirement for them to produce a report for the House of Assembly: "The Minister will get an awful lot of power in this Act."

He added: "My impression is that this Act has caught a number of people off guard."

Government MP Michael Scott said the Act would help deal with a monopoly on the Island: "This Act is dealing with pricing and better management of our energy. We all suffered through that summer when the Belco plant blew up and it put the country at great risk, impacting business and tourism."

Opposition MP Cole Simons told the House he firmly believed the White Paper should have been completed before the commission was formed. He added that he was excited on the Green Paper when he first saw it but now had some suspicions the Government had some unspoken issues with Belco and questioned why they were encouraging people to tap into the company's private grid.

He questioned: "Will the Government buy the grid from Belco?"

Government Minister Walter Roban said the Government had held many meetings with the public and stakeholders and the Opposition's concerns were unfounded. And he added that while they praised the Green Paper they were now upset: "We have to start somewhere. If we do it this week it is too early and if we do it next week we are too late."

Shadow Finance Minister Bob E.T. Richards said: "Generally, we have a Green Paper presented by the Government and followed by the White Paper, which describes Government policy ongoing.

"Legislation is promulgated on the basis of those two preceding events, but what has happened here is the Minister has promised the House he would have a White Paper but instead we have legislation, and that is the cause of some of the comments this morning."

He asked: "What if a Boeing aircraft operation were to build a plane before it has decided on the aeronautical and safety matters. Would you get on that plane?

"I don't think you would. That essentially is the issue here. The gun has been jumped.

"It's a classic case of cart before horse."

Mr. Richards said: "We need to be concerned that we dot all our i's and cross our t's. There's going to be more problems if we go forward because as my colleague said, there are many, many gaps in this legislation going forward."

He added: "I am not impressed by the Price Commission. I think they just rubber stamp price increases by Belco and that is not what we want.

"This organisation (Energy Commission) will replace the Price Commission's work but what we want to know is are they just another rubber stamp for Belco?

"I believe it is important for this commission to exercise a very strong oversight of all producers of electricity, especially Belco."

Mr. Richards added: "The Minister this morning promised to give us a White Paper after the fact. That's not good enough.

"Oversight is required, not only with price, but reliability."

He said: "We still have no policy in relation to energy and it seems to me to be more important. We need this before the legislation."

But Environment Minister Glenn Blakeney praised Mr. Lister and his team, accusing the Opposition of arguing against the Bill for the sake of it.

"I would like to comment the Minister and his team for a very comprehensive overview of this challenge that we have in regard to energy in Bermuda," he said.

"Government says go up, Opposition says go down, Government says go left, Opposition says go right."

"This is a work in progress," he said.

"The reason and rationale for that is because like any other technology, it's a moving target. Because of research and policy we are moving at a slower than run pace, in steps and stages.

"This paper sets out the consultative process. The Minister has taken the initiative to bring to this House a paper and initiative that will take things forward regarding energy challenges.

"I don't understand what the problem is."

Mr. Blakeney said Government had consulted with various energy companies on the Island, such as Belco, Esso and Rubris.

"There has been other consultation," he said. "And now the Minister takes a decision on behalf of the country, you come with criticisms. I just don't get it.

"We have to get it right and that's why we are going in steps and stages, but before we get it right we have to start, and this is the start.

"The Minister has brought this Government paper to us as a base and now we will go forward in defining the policy and we will also educate our consumers.

"We may make some tough decisions that Belco and others may not be on board with but that's life. At the end of the day we have to act in the interests of our consumers."

Grant Gibbons, Shadow Minister of Education, said: "There is no policy here and no clear plan, but I have to say the Minister has got off to a good start.

"We had a Green Paper here a few months ago that was a good start.

"But a Green Paper is a thought process, it does not indicate Government policy."

Dr. Gibbons said: "We see a rush here to get the power first to be able to do stuff and the policy coming later. It's the cart before the horse."

He added: "What we need now is a plan and a policy."

Energy Minister Terry Lister explained the absence of a White Paper was because he refused to "rush" on the formulation of Government's energy policy.

He said the Bill set out the role of the Energy Commission and that a final Energy Bill would be brought before the Legislature in the future.

Mr. Lister said the commission would regulate prices and charges. Anyone selling or distributing energy related commodities had to be licensed by the Minister.

He said Government wanted to encourage residents to gradually take up alternative energy, such as installing solar panels on their homes, and that is why the Budget had set a zero duty on any solar product.

However, individual residents selling back to Belco would also have to obtain a licence.

"We have 30,000 houses in Bermuda and if we see 300 houses every year taking this up, I will be happy with that," he said.

"We've got to keep doing things to encourage people so we are making everything duty free."

He said: "We should do a Green Paper and come back with a White Paper clearly setting out policy and then set legislation, I agree with that. But here's the problem. I have people saying, 'don't rush, don't race'.

"You are not going to accuse me of rushing on the White Paper, I am not going to do that."

He said the Bill was simply replacing the 1974 Price Commission Act in relation to energy, by creating the Energy Commission to control energy prices and changes.

"We are taking one Act off the table and putting another Act in place," he said.

"This Act has that responsibility. We are not trying to create the final Act for Energy, we are not trying to do that, to have the final Energy Act. We must have the policies set out following the White Paper, so I won't do that. It makes no sense to do that."

He said: "What we have here today is a big cart before the horse, I agree, but it's the way we had to do it."

He moved the Bill be committed for its Second Reading.

The Energy Act 2009 has four parts Energy Commission, licence, control of energy prices and charges, and general matters such as designation of inspectors.

The Energy Commission will consist of a chairman and four members, appointed by the Energy Minister for a period of three years.

However, the Minister can also appoint an additional member to assist in an inquiry into a charge for any energy-related commodity or any other matters related to cost or supply.

Mr. Lister said this could be an engineer, architect, accountant, lawyer, or other professional.

"If someone comes and reports an injustice that the price isn't right I can ask the Commission to look into it," said Mr. Lister.

Anyone who fails to meet the Commission or produce documents and other information in relation to an inquiry is committing an offence, punishable with a $5,000 fine.

The Commission must produce an annual report to the Minister by March 31 each year.

The Minister is responsible for issuing licences for production or supply of electrical power or another specified commodity, and for setting out the terms and conditions.

Anyone who produces or supplies power without a licence or who acts in contravention to it can be fined up to $50,000 or serve a prison sentence of up to two years. Conviction on inditement doubles the penalties to $100,000 or up to five years in jail.

The Minister also has the power to revoke or suspend licences.

In terms of energy prices and charges, no business is allowed to vary the price of charge of a commodity without notice in writing to the Energy Commission. This excludes installation or labour charges.

The Commission will then give a direction as to whether the variation is "just and reasonable". The business then has 21 days to appeal the decision.

If a company makes a price change without giving notice it is liable for a $5,000 fine.

The Energy Minister can also apply to the Supreme Court for an injunction restraining any breach or anticipated breach.

In terms of inspectors, the Minister can designate any officer of the Department of Energy as an inspector, with powers to enter a premises to inspect any energy-related apparatus or record.

Anyone who obstructs an inspector can be jailed for six months or fined $5,000, or both.

Regarding membership of the Energy Commission, any member who misses three successive meetings can be dismissed. And no member can take part in an inquiry where they or their spouse has a private interest in the company concerned, for example if they are a shareholder.

During the Bill's committee stage, John Barritt, Shadow Minister of Legislative and Public Administration Reform, called for the Commission's hearings to be held in public.

"I would have thought there would be very limited circumstances when hearings should be private," he said.