Regulation of Services
The public water supply and sewage services provided by the Company in municipalities subject to state regulation are regulated and supervised by the Minas Gerais State Regulatory Agency for Water Supply and Sewage Services – Arsae-MG. The Agency was established by State Law 18,309/2009, in accordance with the national guidelines established by Federal Law 11,445/2007, as amended by Federal Law 14,026/2020.
Within the scope of Arsae-MG, tariff regulation seeks to reconcile the economic and financial balance of service provision, tariff affordability, efficiency, universal access to services, and quality of services. Tariff revenue is structured based on efficient operating costs, taxes and other obligations, special programs, uncollectible revenues and capital costs, less other revenues recognized by the regulation.
The services are remunerated through differentiated tariffs according to the user category, service provided, and range of consumption. The tariff structure includes a fixed component, associated with service availability, and a variable component, calculated based on the billed volume, in cubic meters (m³), in accordance with the rules and tables approved by Arsae-MG.
The current tariff structure comprises 8 (eight) categories: Social Residential I, Social Residential II, Residential, Commercial, Industrial, Public, Philanthropic Entity, and Public Hospital, pursuant to Arsae-MG Resolution 217/2025 and the tariff structure methodology applicable to the 3rd Periodic Tariff Review.
Periodic Tariff Review
The periodic tariff review consists of a comprehensive reassessment of the conditions under which services are provided as well as the market served. The process considers, among other factors, efficient operating costs, taxes and other obligations, social programs, uncollectible revenues, capital costs, other revenues, the X Factor, tariff incentives, financial components, and tariff structure.
In the 3rd Periodic Tariff Review, Arsae-MG established the tariffs for the 2026-2029 tariff cycle. The resulting tariffs became effective on January 22, 2026. The Average Tariff Effect, which represents the average change in the tariffs charged to users, was 6.56%, pursuant to Arsae-MG Resolution 217/2025 and CRE Technical Note 16/2025.
Annual Tariff Adjustments
For the tariff cycle from January 2026 to December 2029, annual tariff adjustments follow the methodology established in CRE Technical Note 11/2025, updated in December 2025.
In the annual adjustments, base tariffs are updated for inflation and for the X Factor. In the current cycle, the X Factor corresponds to the mechanism for sharing productivity gains with users. Following the update of base tariffs, tariff incentives associated with targets for reducing and controlling losses, universal access to water supply, universal access to sewage services, and service quality are taken into account, together with the applicable financial components, to determine the tariffs actually charged to users.
Financial components correspond to temporary adjustments or compensations, generally related to prior periods, and may increase or reduce the tariff actually charged. These amounts are not permanently incorporated into the base tariffs.
Further information on the regulatory environment, the history of the tariff cycles, and the rules applicable to the determination of theCompany’s tariffs is available in item 1.10.c of the 2026 Reference Form, as well as in the resolutions and technical notes published by Arsae-MG.
The history of the Company’s tariff adjustments and tariff reviews since 2010 is presented below.
| MONTH OF APPROVAL | AVERAGE TARIFF IMPACT | EVENT | BEGINNING | RESOLUTION | TECHNICAL NOTES |
| 12/2025 | +6.56% | 3rd Tariff Review | 22 January 2026 | Resolution nr. 217/2025 | CRE nº 16/2025 |
| 11/2024 | +6.42% | Tarif Adjustment | 01 January 2025 | Resolution nr 197/2024 | GRT nº 07/2024 |
| 11/2023 | +4.21% | Tarif Adjustment | 01 January 2024 | Resolution nr 185/2023 | GRT nº 06/2023 |
| 11/2022 | +15.70% | Tarif Adjustment | 01 January 2023 | Resolution nr 173/2022 | GRT nº 01/2022 |
| 06/2021 | -1.52% | 2nd Tariff Review | 01 August 2021 | Resolution nr 154/2021 | CRE 14/2021 |
| 06/2020 | +3.04% | Tarif Adjustment | 01 November 2020 | Resolution nr 141/2020* | GRT 10/2020 |
| 06/2019 | +8.38% | Tarif Adjustment | 01 August 2019 | Resolution nr 127/2019* | GRT 07/2019 |
| 06/2018 | +4.31% | Tarif Adjustment | 01 August 2019 | Resolution nr 111/2018 | GRT 09/2018 |
| 06/2017 | +8.69% | 2nd Step Tariff Review | 30 July 2017 | Resolution nr 96/2017 | CRFEF 69/2017 |
| 04/2016 | +13.90% | 1st Step Tariff Review | 13 May 2016 | Resolution nr 82/2016 | CRFEF 30/2016 |
| 04/2015 | +15.04% | Tariff Adjustment | 13 May 2015 | Resolution nr 64/2015 | CRFEF 02/2015 |
| 04/2014 | +6.18% | Tariff Adjustment | 13 May 2014 | Resolution nr 49/2014 | CRFEF 02/2014 |
| 04/2013 | +5.25% | Tariff Adjustment | 13 May 2013 | Resolution nr 35/2013 | CRFEF 004/2013 |
| 04/2012 | +4.34% | Tariff Adjustment | 13 May 2012 | Resolution nr 20/2012 | NT 005/2012 |
| 03/2011 | +7.02% | Tariff Adjustment | 23 April 2011 | Resolution nr 04/2011 | NT 004/2011 |
| 01/2010 | +3.96% | Tariff Adjustment | 01 March 2010 | Resolution nr 001/2010 | NT 003/2010 |
*The application of this adjustment was postponed for 90 (ninety) days as of 08/01/2020.
Public Hearings and Consultations
Arsae-MG holds Public Hearings and Consultations in order to obtain greater technical and social support for its decision-making process.
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Legislation
Federal Legislation
Federal Law 14,026/2020*: updates the legal framework for basic sanitation and amends Law nr. 11,445/2007, to improve the structural conditions of basic sanitation in the country.
Federal Law 11,445/2007*: establishes national guidelines for basic sanitation; amends Laws 6,766/1979, 8,036/1990, 8,666/1993, 8,987/1995; it repeals Law 6,528/1978, and makes other provisions.
Federal Decree 7,217/2010*: regulates Law 11,445/2007, which sets forth the national basic sanitation guidelines, among other provisions.
Federal Law 11,107/2005*: provides general rules for the contracting of public consortia, and makes other provisions.
Federal Decree 6,017/2007*: regulates Law 11,107/2005, which provides general rules for the contracting of public consortia.
Federal Law 8,987/1995*: rules on concession and permit regimes for the provision of public services set forth in Article 175 of the Federal Constitution, and makes other provisions.
State Legislation
State Law 18,309/2009*: sets forth rules for water supply and sewage services, creates the Minas Gerais State Water and Sewage Services Regulatory Agency – Arsae-MG, and provides other measures.
State Decree 47,884/2020*: contains the charter of the Minas Gerais State Water and Sewage Services Regulatory Agency – Arsae-MG.
* Portuguese Only