STATE-run National Power Corp. (Napocor) posted a net loss of P7.2 billion in 2008, a sharp decline from the P136 billion net income it posted a year ago.

In an interview, Napocor president Froilan Tampinco explained that the net loss in 2008 was due largely to a combination of factors including soaring fuel prices, foreign exchange losses and the considerable amount refunded to its customers.

?What we had last year was an abnormal scenario where prices of fuel went up but we were giving refunds to reflect the generation rate adjustment mechanism (GRAM) and the incremental currency exchange rate adjustment (Icera) for periods before 2008,? Tampinco noted.

Last year, the Energy Regulatory Commission said Napocor had overcharged its customers P10 billion as the power firm failed to file its GRAM and Icera applications from July 2006 to March 2008.

GRAM is a quarterly adjustment mechanism that allows utilities to recover costs associated with fuel and purchased power.

The Icera, on the other hand, is a quarterly adjustment mechanism that allows utilities to recover foreign exchange-related costs. A stronger peso usually means a reduction in rates.

In 2008, prices of crude oil in the world market spiked to its peak of more than $140 a barrel, but Napocor was not able to adjust its generation charges to reflect the steep increases in oil prices, Tampinco added.

The net loss Napocor posted last year was however better than the earlier estimates of the Department of Budget and Management, which saw a net loss of P63 billion in 2008 for the state-run corporation.

According to its unaudited financial statement, Napocor?s revenue reached P4.47 billion while its cost of sales was P5.7 billion, resulting in a loss of P1.23 billion.

Records also showed that Napocor?s operating expenses reached P5.29 billion, while foreign exchange losses were at P683.7 million.

For 2009, Tampinco earlier said Napocor could end the year with a ?good financial picture,? helped by the ?good liability management? of Power Sector Assets and Management Corp.

He said Napocor might post a profit this year, reversing the losses in 2008.