By Brazil Stock Guide – Sabesp (B3: SBSP3) said it will apply an average 6.5% adjustment to water and sewage tariffs starting January 1, 2026, following the release of ARSESP Resolution No. 1,748/2025 in the São Paulo State Official Gazette. The company said the calculation reflects a 10.6% increase in the equilibrium rate, the contractual benchmark that anchors the region’s tariff model.
ARSESP set the equilibrium rate and published ten tariff tables covering all consumer categories and operational regions. In the GT-O directorate, residential consumption of 0–10 m³ rises to R$ 40.42, while the social-tariff band stays at R$ 11.14. Commercial and industrial categories show sharper increases, with the above-50-m³ tier reaching R$ 31.90.
Higher increases for corporate consumption
Commercial and industrial users absorb some of the most significant adjustments. In GT-O, the 21–50 m³ bracket rises to R$ 30.62, and the above-50-m³ bracket reaches R$ 31.90. In special regions such as Adamantina and Pirapozinho, the commercial special above-50-m³ band climbs to R$ 18.41 for water and R$ 14.68 for sewage. Vulnerable residential brackets remain low, including R$ 1.06 for the 11–20 m³ range.
“Sabesp will keep the market informed of any developments,” the company said in a securities filing signed by CFO Daniel Szlak.
Regulatory framework and rebalancing
The adjustment follows São Paulo’s regionalized sanitation model and divides the state into blocks and ties tariff recomposition to investments, cost recovery and universalization metrics. Contract mandates annual realignments to balance operating costs, asset amortization and regulated returns, as well as extraordinary items such as legal decisions and social-tariff programs.
ARSESP also partially recognized rebalancing claims related to contract revisions, judicial demands and the temporary maintenance of users under social tariffs, subject to further review and monetary correction.
Privatization, modicity fund and political stakes
The São Paulo state government, which led Sabesp’s privatization, allocated part of the sale proceeds to a tariff-modicity fund that softens increases during the early years of the concession. That mechanism explains why customers face an average 6.5% increase, even as the equilibrium rate climbs 10.6%. The sale of Sabesp’s controlling stake to Equatorial Energia is a flagship initiative of Governor Tarcísio de Freitas, who is seen as a potential 2026 presidential contender against President Luiz Inácio Lula da Silva.
Sabesp is also navigating a water-scarcity cycle, with weak rainfall and falling reservoir levels in the systems supplying Greater São Paulo. Pressure on basins such as Cantareira and Alto Tietê raises the importance of planned investments and may intensify future tariff debates.
Correction of structural distortions
Since last year, Sabesp has been implementing a gradual correction of tariffs for high-consumption categories, including commercial, industrial and certain public users. Historically, these groups paid lower average tariffs than residential households due to long-standing cross-subsidies.
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