UPDATE 1-China's Huaneng calls for power tariff hikes

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HONG KONG, Oct 22 (Reuters) - Huaneng Power International (0902.HK), China's top listed electricity power supplier, said on Wednesday it needs huge power tariff hikes to offset soaring coal costs, as it expects prices to remain high in 2009.

Executives told analysts on a conference call that the firm needs another 0.27 yuan ($0.04) per kilowatt-hour of tariff increases this year to maintain its profit level of 2007, but did not say if they were referring to actual profit or growth.

Beijing-based Huaneng (HNP.N) (600011.SS) aims to contain unit fuel cost growth at 50 percent this year, much higher than an original target of 18 percent set at the beginning of 2008.

Its unit fuel cost rose 72 percent year on year in the third quarter to 302.58 yuan per megawatt hour, they said.

Asia coal prices tumbled to a 10-month low recently but the cost of Chinese coal for power plants is still on the rise.

"Pit mouth coal prices are rising as production in some local coal mines declined," said one executive.

"With the approach of winter and (as) supply is getting tight, coal prices are likely to rise slightly. We expect coal prices to remain high next year."

Huaneng purchased a total of 68.26 million tonnes of coal in January to September, nearly half of which was from the spot market.

Shares in Huaneng fell 8.4 percent on Wednesday after it posted a loss of 2.16 billion yuan ($316 million) in the three months ended September, versus a profit of 1.5 billion yuan a year ago, and expects a record loss for the whole of 2008. [ID:nHKG353449]

It made a net profit of nearly 6 billion yuan in 2007.

The Chinese government raised power tariffs in July and August for a total of around 0.04 yuan per kilowatt, but this is still not enough to fully offset the rising coal costs.

Huaneng has set aside capital expenditure of 26 billion yuan in 2008, 28 billion yuan in 2009 and 12 billion yuan in 2010, mainly to build power plants, the executives said without elaborating. ($1=6.837 Yuan) (Reporting by Judy Hua; editing by Simon Jessop)