Success Story: Sabesp
The partnership with the São Paulo utility company Sabesp led to the creation of a document that anticipated Arsesp’s regulatory agency requirements and established standards to be adopted by other companies.
Codex Utilities was also responsible for increasing integration among Sabesp’s departments and for automating and optimizing data processing that was previously done manually.
After five years of joint work, Codex Utilities and Sabesp (Water & Wastewater Company of the State of São Paulo) celebrate several results that have elevated the São Paulo sanitation utility to a new level of regulatory excellence. Achievements were possible thanks to the Regulatory Remuneration Base Improvement Program, which began in August 2019 and made a significant impact on the company, one of the largest water & wastewater utilities in the world.
For Sabesp, the Regulatory Remuneration Base (BRR) is fundamental for several processes within the company. It is one of the most essential components in a tariff review process, as it represents the value of the company’s assets that are recognized by the regulatory agency (ARSESP – Regulatory Agency for Public Services of the State of São Paulo). Therefore, Sabesp started this program with Codex Utilities, which aims to:
Ensuring the effectiveness of physical and accounting asset control
Regulatory Remuneration Base (BRR) Quality
Recognition of investments in tariff revisions
~30 contractual objectives (already delivered)
The contract provided for about 30 deliverables, divided into macro objectives: initiation, survey of requirements, development, approvals and support.
The first major deliverable was the Asset Control Manual (MCPR). “The project was largely inspired by those of utilities companies, the electric regulatory agency manual, and how distributors account for all investments in order to request tariff reimbursement” reveals Ivani Rost, Director of Implementation at Codex Utilities. According to her, the main goal of the project is for Sabesp to have better control over its asset management, allowing it to respond more effectively to the regulatory agency and recover the financial returns on its investments.
Ivani also points out that the water & wastewater sector is not as evolved in this regard as the electricity sector, nor does it have the strength of a federal agency, as the regulatory agency for electric companies. The National Water and Wastewater Agency (ANA) is still structuring to assume the role nationally, so, in the case of Sabesp, it is necessary to report to ARSESP (Regulatory Agency for Public Services of the State of São Paulo).
When the New Legal Framework for Water & Wastewater was announced, ARSESP (Regulatory Agency for Public Services of the State of São Paulo) began conducting research to create a regulatory manual, the “bible” that everyone would have to follow when reporting to it. Sabesp came out ahead and did not want to wait for Arsesp’s manual: it decided to create its own with Codex Utilities, inspired by the company’s experience in the electric sector.
After months of work, with Codex Utilities allocated to Sabesp, the manual was ready and was shared with Arsesp. Ivani recalls that “when Arsesp actually started her work, we held a series of meetings to explain, and I dare say that 98% of their manual is ours, because there was an immense adherence. It was practically ready. ”
The Superintendent of Contractual Management and Institutional Relations of Sabesp, Nelson Bevilacqua, stated in a release “that Arsesp adopted it practically in full, within its procedure, for all other regulated water & wastewater companies. And this started here, with the advisor who became the manual”.
The manual became a crucial guide. Everything that is done in relation to assets follows that document, which also allowed to initiate a series of developments and systemic adjustments so that everyone understood the standards defined in the manual.
The next step was the system integration as Geographic Information System (GIS), CAD, Electronic Document Management (GED) and SAP. “A large part of the asset information, mainly accounting information, is in their SAP. We had to change processes so that the flows met the manual” says Ivani. In addition, there were efforts to develop and review institutional procedures. Based on the systemic adjustments, it was possible to adjust these procedures and redefine steps.
In this regard, Fábio Ferreira, a specialist in Regulation and Asset Management at Codex Utilities, highlights that the integration between the company’s departments was another major achievement. “We presented an updated scenario focused on regulation and control processes, as well as the importance of accurate asset records.” We move a lot of people within Sabesp, integrating several areas” he points out.
“Approximately 1,600 hours of work were involved, covering areas such as Information Technology, Regulation, Accounting, Asset Management, Maintenance, Operations, and others.” “Taking the launch workshop of the verification module as an example, about 480 people participated both in person and remotely, with over a thousand views after its publication on the company’s Workplace.”
“Following these steps, the Regulatory Management Portal for Water & Wastewater, PGR-S, was implemented. Ivani explains that PGR-S is a monitoring system that ‘highlights inconsistencies through a verifier and helps identify and analyze issues.'”
It is a tool that aims to assist Sabesp in the consolidation of asset information by extracting and obtaining data from the corporate systems of origin. It also aims to ensure the quality of data and carry out the reconciliation of physical and accounting asset records. All this to help accurately respond to regulatory demands and support the tariff review process, improving the company’s asset management. It is worth noting that Sabesp is the pioneer in the creation and implementation of this system in the sanitation sector.
Bruno Magalhães D’Abaddia, Director of Regulation and New Business at Sabesp, described the PGR-S during its October 2023 launch as “a tool designed to streamline and improve our performance across all areas.” Nelson Bevilacqua, Superintendent of Contract Management and Institutional Relations at Sabesp, added, “The PGR-S is a crucial tool for sanitation, enabling us to achieve much more.”
“Reconciliation was a big challenge because, with physical systems, each owner focuses on their own data, leading to isolated information.” “Reconciliation is broader,” Ivani emphasizes, noting that, in Sabesp’s case, there were about 1.2 million assets.
“Data verification and reconciliation were done manually. Our tool brings consistency and more speed to this process” says Ferreira, noting that this data processing went from a process that could take days, to an automatic one, which takes a few minutes.
This represented a huge gain during the reconciliation, especially in the accounting part. In the case of the testing environment, there are six million data points processed in six minutes. And in the production environment, there are eleven million data, processed in 19 minutes. “This way, the team has more time to focus on analysis and verifying information,” adds Ferreira.
Solution applied in one of the largest water & wastewater companies in the world
Company with more than 1.2 million assets
GIS, CAD, GED and SAP integration
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