Copasa proposes a 1% cap on Factor X to ANA

Copasa submitted proposals to Brazil's National Water Agency (ANA) requesting changes to draft guidelines for water and sewage tariff reviews. The public consultation, which closed on October 2 after an extension, received 884 contributions from civil society, companies, and sanitation entities.

The Minas Gerais utility proposed capping the annual application of Factor X at 1%. The mechanism transfers productivity gains to consumers via tariffs, and Copasa argued the ceiling preserves predictability and the capacity to finance investments. Copasa and São Paulo utility Sabesp both requested an explicit ban on double-counting efficiency gains across multiple tariff adjustment mechanisms.

Regarding capital remuneration, Copasa asked regulators to recognize interest during construction, proposing that external delays such as licensing and expropriations should not be deemed unjustified. It also called for greater flexibility in calculating the cost of capital to reflect country risk and actual borrowing conditions, while defending the supremacy of existing contractual terms against retroactive rule changes.

For ancillary revenue, ANA proposed sharing between 30% and 70% of net profits with users. Copasa suggested that sharing be optional and recommended a cap of no more than 15% of revenue, arguing high percentages discourage business diversification. To address tax reform, Copasa advocated for periodic or full economic rebalancing requests as impacts are proven, rather than a single procedure.