Regulation

The regulation of public services in the current model was developed in the country during the 1990s, particularly after the Concessions Law (Federal Law Nº 8,987/1995), when the country’s first regulatory agencies were founded. With the enactment of Federal Law Nº 11,445, in 2007, also known as the legal framework for basic sanitation , which establishes the national guidelines for basic sanitation, the sector has undergone institutional change and, within this context, by means of Supplementary State Law Nº 1,025/2007, ARSESP – São Paulo State Public Services Regulatory Agency was created with the purpose of regulating, supervision and inspecting the services offered and delegated by state and municipal authorities under the terms of Federal Law Nº 11,107/2005.

In June 2020, Federal Law Nº 14,026 was enacted, which updated the legal framework for basic sanitation and assigned to the National Water and Basic Sanitation Agency (ANA) the power to edit reference standards on sanitation services. The Law also prohibits services to be provided through program contracts.

Remuneration for water and sewage services is done through tariffs set by ARSESP during ordinary four-year revision, or extraordinary revision, and annual tariff adjustments. While tariff revision address the recomposition of tariffs so they can cover operational costs, maintenance and expansion considering an efficient regime for expenses and a prudence regime for investments, according to the rules determined by the ARSESP, the readjustments are intended to maintain the tariff level by applying the inflation (IPCA) variation, deducting the X Factor, in order to share efficiency with users, and is also adjusted by the Service Quality Factor (IGQ), which can be positive, null, or negative according to the results obtained versus the goals established by Sabesp and approved by ARSESP.

SABESP’s current tariff structure consists of tariffs according to categories of use, residential, commercial, industrial and public, and within these categories there are special tariffs for users with less purchasing power, such as the social tariff and favelas (only in the Metropolitan Region of São Paulo – SPMR), for social assistance entities and public administration entities that sign a contract with SABESP for the implementation of the Rational Use of Water Program – PURA. In addition, there are also tariffs for large commercial and industrial consumers, and for wholesale supply of water and sewage treatment to municipalities that operate their water distribution and sewage collection systems in the RMSP.

Legislation

Federal Legislation

Laws Description
Regulatory Decree 10,710/2021 Regulates the methodology for proving the economic and financial capacity of public sanitation service
Federal Law 14,026/2020 New Legal Framework for Basic Sanitation
Federal Law 13,303/2016 State-Owned Enterprises Law
Federal Law 11,445/2007 Basic Sanitation Law
Federal Law 11,107/2005 Public Consortia and Cooperation Agreement
Federal Law 8,987/1995 Federal Concessions Law

State Legislation

Laws Description
State Law 17,383/2021 Creation of regional unit for basic sanitation
State Law 16,525/2017 Sabesp’s corporate reorganization
Supplementary State Law 1,025/2007 São Paulo State Sanitation and Energy Regulatory Agency – ARSESP
Supplementary State Law 11,454/2003 Definition of the minimum percentage of voting shares held by the State
Tariff Decree 41,446/1996 Regulation of the tariff system for services provided by SABESP
State Law 119/1973 Constitution of Companhia de Saneamento Básico do Estado de São Paulo – SABESP
Readjustments and Revisions
São Paulo State Public Services Regulatory Agency  – ARSESP
1st Tariff Review 2nd Tariff Review 3rd Tariff Review
Year
Event
Table of Contents
Date
Documents
Resolutions Technical Notes Detailed Reports
2021 Tariff Structure Review 2022 1,150 TN-17-2021 DR-003-2021
2021 Tariff Review 7.10% 05/10/2021 1,150 TN-16-2021 DR-002-2021
2020 Tariff Adjustment  3.40% 08/15/2020 1,021  –  –
2019 Tariff Adjustment 4.72% 05/11/2019 859  –  –
2018 2nd part of the Tariff Review 3.50% 06/09/2018 794 TN-06-2018 DR-005-2018
2017 1st part of the Tariff Review 7.88% 11/10/2017 753 TN-04-2017 DR-004-2017

 

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