By Brazil Stock Guide – Sabesp (B3: SBSP3; NYSE: SBS), privatized in 2024 and now controlled by Equatorial Energia (B3: EQTL3), said it will recognize a negative impact of R$107 million (about US$21 million) in its third-quarter 2025 results after São Paulo’s state regulator ARSESP revised the tariff-balance tables under its concession contract. The change increases the provision tied to the FAUSP fund (Conta Vinculada 2) from 3.22% to 3.74% of application revenue.
The adjustment stems from ARSESP’s August 2025 decision to apply a 4.2167% factor on tariff tables defined in Resolution 1,514/2024. Between 3Q24 and 2Q25, Sabesp had provisioned at 3.22%, creating a shortfall that must now be booked retroactively in the quarter’s accounts.
The adjustment reflects the rules defined by the regulator and will be fully recognized in the company’s results.
Regulatory balance
The episode underscores how even small shifts in tariff-calculation methodology can generate meaningful effects on utility earnings. For investors, the provision signals that Sabesp’s new Concession Agreement No. 01/2024 and FAUSP-linked accounts are being closely monitored by ARSESP to ensure economic and financial balance.
This is the first major adjustment since the concession was renewed under a new regulatory framework in 2024. The mechanism is designed to keep consumer tariffs (tarifa de aplicação) below the equilibrium tariff, with FAUSP resources bridging the gap. Going forward, investors will watch whether similar revisions shape annual tariff resets and periodic reviews, which are crucial for Sabesp’s cash flow.
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