MANILA, Philippines?Energy Secretary Angelo T. Reyes said Wednesday the government was banking on the President's declaration of a state of calamity in Mindanao to help solve the worsening power situation in the island.

Reyes explained at a news briefing that this option would allow the government to tap the calamity fund and fast-track the procurement processes since such projects to be undertaken under a state of calamity are exempted from bidding. Also, this option would not need legislative approval.

However, it was not clear what kind of projects and programs the government would be allowed to undertake to ensure adequate power supply in Mindanao, particularly during the elections, since the government, under the Electric Industry Power Reform Act of 2001, is still prohibited from generating and selling power--even with such a declaration.

?If it's approved, a structure will be set up with guidelines and procedures that would address this problem, and we are not discounting possibility of private sector involvement. We would want to ensure maximum transparency and accountability because it involves big money,? Reyes said.

While evading questions as to how the government will exactly solve the power crisis without the need for a special authority, Reyes admitted that the acquisition of modular generating sets, which would cost as much as P5.5 billion, would be the only and quickest way to solve the acute power supply shortages in Mindanao.

These generator sets could generate about 160 MW in additional capacities.

As of Wednesday, the Mindanao grid posted a power supply deficit of 748 megawatts (MW), the highest deficiency recorded in recent years.

According to the National Grid Corporation of the Philippines, this was still due to the limited available capacities from National Power Corp.'s hydro power plants, most of which have water reservoirs that are drying up due to the El Niño weather disturbance.

As of March 7, Reyes said, the hydropower facilities in Mindanao were generating a dismal 90 MW, less than 10 percent of the hydropower plants' total capacity of 994 MW.

And since the government is prohibited from generating power, Reyes said he will instead, urge the private power generation sector in Mindanao to lease or import the needed gensets, adding that these companies will, in turn, be compensated for their efforts.

?The option is to purchase power sets (and) that will have to be done by the private sector. We will ask them what they need so government can support them,? he added.

Reyes disclosed that several companies have already expressed interest in procuring/leasing the diesel gensets to help the government solve the power crisis in Mindanao.

By using these diesel gensets, generation companies could charge a hefty P14 per kilowatt-hour, more than fourfold of the current electricity price pegged at less than P3 per kWh, since fuel oil is more expensive than hydropower sources, he added.

When asked if this move could be implemented in time for the May 10 elections, Reyes said that it may take two to four months to put in place all the gensets needed for Mindanao. As such, even if the government decides to declare a state of calamity anytime soon and urge the private sector to lease these gensets, it may be too late.

Reyes declined further comment.

The energy chief also said that the Department of Energy will be implementing a supply augmentation program, wherein big industrial firms or commercial enterprises that generate their own electricity requirements are tapped to sell their excess capacities to those who would need it.

During peak hours, these big industries may also be asked to use their own fuel generating sets instead of using electricity from the Mindanao grid, for which they will be compensated.

Reyes, who will be in Davao on Thursday for the power stakeholders forum, said he would find out how much capacities can be freed up and be made available to the Mindanao grid through this program.

Reyes added that should worse comes to worse and if the private sector will not be able to undertake the leasing of gensets, then the ?government will have to do it, because we cannot let the situation go on.?

?Government can always invoke the national welfare clause. Government is not helpless,? he noted.

Meanwhile, the NGCP said Luzon grid customers can expect to have uninterrupted power service as it recorded enough power supply reserves of 223 MW as of Wednesday.

Visayas, however, suffered a 30-MW supply deficit yesterday because two units of Salcon Power Corp.'s Cebu diesel plant needed to have an emergency shutdown.