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PUBLIC HEARING No. 003/2014 PRESENTATION AND DISCUSSION OF THE PROPOSED ARSESP RESOLUTION TO INCLUDE THE CONTINGENCY TARIFF MECHANISMS IN SABESP’S WATER CONSUMPTION REDUCTION INCENTIVE PROGRAM 12/29/2014
BACKGROUND
2
CANTAREIRA SYSTEM’s WATER INFLOW01/1930 TO 12/2014
3FROM JANUARY TO DECEMBER 2014, THE FLOW INTO THE SYSTEM WAS THE LOWEST IN HYSTORY: 25% LOWER THAN THE MINIMUM OR 57% BELOW AVERAGE
Average Previous Minimum 2014
FLOW INTO THE CANTAREIRA SYSTEMPROBABILITY OF EXTREME EVENTS
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•IT IS AN EXTREME EVENT ALMOST IMPOSSIBLE TO HAPPEN;•ALTHOUGH IT IS MORE FREQUENT, WITH INTERVALS OF APPROXIMATELY 11 YEARS BETWEEN MINIMUM FLOWS, STATISTICALLY, IT IS NOT POSSIBLE TO PROVE THE EXISTENCE OF HYDROLOGICAL CYCLES;•IN ADDITION, THE SERIES HAS STOCHASTIC TENDENCIES AND SEASONALITY (CHANGE WITH TIME);•AS A RESULT, IT IS NOT POSSIBLE TO SAY THAT THIS EVENT COULD HAVE BEEN PREDICTED.
PREVIOUS MINIMUM
JANUARY 1953 61 0,332773504842653000000%FEBRUARY 1971 43 0,017437565864682800000%MARCH 2012 2 0,439623818054460000000%APRIL 2003 11 0,154224473699473000000%MAY 1969 45 0,000196671394420228000%JUNE 2003 11 0,000000005272902122412%JULY 2003 11 0,000000032180255018591%
AUGUST 2003 11 0,000346360657605245000%SEPTEMBER 2003 11 0,020056348345528800000%OCTOBER 2000 14 0,000000599437834775889%NOVEMBER 1954 60 0,000707835366317871000%DECEMBER 1963 51 0,002557832898377440000%
28 0,000000003217563736978%
0,000000000000000000104%
AVERAGE FROM JANUARY TO DECEMBER
PROBABILITY OF JANUARY‐DECEMBER AVERAGE RECURRENCE
MONTHPROBABILITY OF OCCURRENCE
2014
YEAR OF OCCURENCEYEARS SINCE THE PREVIOUS
OCCURRENCE
Initiatives have reduced the use of the Cantareira system by 13.2 m³/s
5
SUPPLY AND DEMAND MANAGEMENT ENABLED A 13.2 m³/s REDUCTION IN PRODUCTION WITHOUT
AFFECTING THE POPULATION
Water Saved per Action Performed
(in m³/s)
PRVBONUS
Water Transfer
Guarulhos
WATER CONSUMPTION REDUCTION INCENTIVE PROGRAMGRADUAL POLICIES IN EXACT PROPORTION TO THE NEED
6
DISCLOSURE GEOGRAPHICCOVERAGE
RULE
END OF TERM (OR NORMALIZATIONOF THE RESERVOIRS, WHICHEVER COMES
FIRST)
BEGINNING OF THE IMPACT ON THE BILLS
REDUCTION(on the AVERAGE betwen Feb/13 and Jan/14)
BONUS
Feb 4, 2014 CANTAREIRA ≥ 20% 30% Sept/14 Mar/14Apr 2, 2014 Greater SP ≥ 20% 30% Dec/14 Apr/14
May 28, 2014 Greater SP + PCJ BASIN
≥ 20% 30%Dec/14 June/14
Oct 23, 2014 Greater SP + PCJ BASIN
≥ 10 and < 15%
10%
Dec/14 Nov/14≥ 15 and< 20%
20%
≥ 20% 30%
Dec 19, 2014 Greater SP + PCJ BASIN
≥ 10 and < 15%
10%
Dec/15 Nov/14≥ 15 and < 20%
20%
≥ 20% 30%
CONTINGENCY TARIFF PROPOSAL
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CONTINGENCY TARIFFPROPOSED CRITERIA
8
• Not applicable to clients with an average consumption of up to 10m3 per month;• Not applicable to fixed demand customers;• To be applied for the same bonus concession area• Maintenance of the same calculation basis of reference consumption, i.e. the average consumption based
on which the Company will verify if there was a consumption increase will continue to be from February 2013 to January 2014;
• Creation of budget and accounting accounts to identify and compose the balance made up by the difference between the amounts granted as bonus and the amounts arising from the additions deriving from consumption increases;
• Allocation of this accounting and budget balance to measures to mitigate and manage crises arising from the water shortage;
• Exceptions will be managed on a case‐by‐case analysis
Consumption Increase Increase on Bills< 20% 20%> 20% 50%
WATER CONSUMPTION REDUCTION INCENTIVE PROGRAMDEMAND‐BASED APPROACH
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‐40%
‐30%
‐20%
‐10%
0%
10%
20%
30%
40%
50%
60%
‐50%
‐48%
‐46%
‐44%
‐42%
‐40%
‐38%
‐36%
‐34%
‐32%
‐30%
‐28%
‐26%
‐24%
‐22%
‐20%
‐18%
‐16%
‐14%
‐12%
‐10% ‐8%
‐6%
‐4%
‐2% 0% 2% 4% 6% 8% 10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
32%
34%
36%
38%
40%
42%
44%
46%
48%
50%
% BILL
% CONSUMPTION
CONTINGENCY TARIFF
BONUS
CONTINGENCY TARIFF BASIS
10
ECONOMIC BASIS
11
• EXPANSION OF BONUS RANGES: ENCOURAGE SEGMENT “B” TO MIGRATE TO SEGMENT “A”• CONTINGENCY TARIFF: ENCOURAGE SEGMENT “C” TO MIGRATE TO SEGMENT “B” AND/OR “A”. REDUCTION TARGET OF 2.5 M3/S
45%
52%
46%
51%49% 50%
53%
31%27% 28% 25% 26% 25% 23%24%
21%26% 24% 25% 25% 24%
MAI JUN JUL AGO SET OUT NOV
A: REDUZIU E ATINGIU B: REDUZIU E NÃO ATINGIU C: AUMENTOUReduction with bonus Reduction w/o bonus Increased
Art. 21. In situation of critical scarcity or contamination of water resources that demand the adoption of rationing, declared by the authority that manages the water resources, the regulatory agent may adopt contingency tariff mechanisms, with the purpose of covering the resulting additional costs, guaranteeing the financial balance of the rendered service and the management of demand.Sole paragraph. The contingency tariff, if adopted, should be charged preferably from the consumers who exceed the rationing limits.
LEGAL BASISDECREE No. 7,217, OF JUNE 21, 2010
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LEGAL BASISDECREE No. 7,217, OF JUNE 21, 2010
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DECREE INTERPRETATION
CRITICAL SCARCITY SITUATION
ITS PRESENCE IS UNDENIABLE
GUARANTEEING THE DEMAND MANAGEMENT
THE PURPOSE OF THE MEASURE IS TO REDUCE DEMANDFINANCIAL BALANCE HAS BEEN GUARANTEED THROUGH BUDGET ADJUSTMENTS
THE REGULATORY AGENTMAY ADOPT CONTINGENCY TARIFF MECHANISMS
THIS IS WHAT WE PROPOSE TO SOCIETY IN THIS HEARING
IT WILL BE APPLIED TO CONSUMERS WHO EXCEED THE RATIONING LIMITS
THE TARGET AUDIENCE IS DEFINEDTHE RATIONING LIMITS ARE DEFINED: A REDUCTION OF 2.5 M3/S IN DEMAND
LEGAL BASISDECREE No. 7,217, OF JUNE 21, 2010
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•APPROPRIATEINTERPRETATION
THE WATER RESOURCE MANAGEMENT AUTHORITIES (ANA AND DAEE), THROUGH SUCCESSIVE RESOLUTIONS, REDUCED THE OUTFLOW THAT SABESP MAY REMOVE FROM THE CANTAREIRA SYSTEM
AS A RESULT, THE WATER RESOURCE MANAGEMENT AUTHORITIES HAVE ALREADY DECLARED THAT SABESP IS BEING RATIONED IN ITS INPUT, NOT BEING ALLOWED TO REMOVE MORE THAN A DEFINED LIMIT FROM THE CANTAREIRA SYSTEM
GIVEN AN INPUT RESTRICTION, BOTH SUPPLY AND DEMAND MUST ADAPT TO THE NEW LEVEL
SUPPLY WAS ADJUSTED THROUGH AN INCREASE IN PRODUCTIVITY: THE USE OF LOWER INPUTS TO PRODUCE THE SAME AMOUNT. THE REDUCTION OF PHYSICAL LOSSES, FOR EXAMPLE, INCREASES PRODUCTIVITY.
DEMAND CAN BE ADJUSTED IN TWO WAYS:PASSIVELY: SABESP RESTRICTS SUPPLY, UNILATERALLY IMPOSING A REDUCTION IN DEMAND = A CLASSICAL CASE OF ROTATIONACTIVELY: SABESP PROMOTES A POLICY ENCOURAGING CONSUMERS TO VOLUNTARILY REDUCE DEMAND THROUGH PRICE MECHANISMS AND INSTITUTIONAL AND SECTORAL AWARENESS‐RAISING INITIATIVES
DECREE ADOPTION OF RATIONING, DECLARED BY THE WATER RESOURCE MANAGEMENT AUTHORITY
17
19
21
23
25
27
29
31
33
35
jan/13
fev/13
mar/13
abr/13
mai/13
jun/13
jul/1
3
ago/13
set/13
out/13
nov/13
dez/13
jan/14
fev/14
mar/14
abr/14
mai/14
jun/14
jul/1
4
ago/14
set/14
out/14
nov/14
Prod
uced
flow
in m
³/s
EQUIVALENCE
Water Production in the Cantareira System (m³/s)
Rotation of 2 days with water and 1 day without water
Rotation of 2 days with water and 2 days without water
Rotation of 1,5 days with water and 3 days without water
Rotation of 2 days with water and 5 days without water
PRODUCTION IN THE CANTAREIRA SYSTEM AND EQUIVALENCE IF A ROTATION HAD BEEN ADOPTED
16
Pursuant to DAEE Ordinance 1213, of August 6, 2004, Joint Resolution ANA/DAEE no. 428, of August 4, 2004, Joint Resolution ANA/DAEE no. 335, of March 5, 2014, especially its article 3, and Joint Resolution ANA/DAEE no. 1672, of November 17, 2014, we hereby announce that the upper limit for effective removal (demand less inflow) of volume of the Equivalent System for December 2014 will be of 30 million m3.
Monthly average outflow of the PCJ basins in question is 3.0 m3/s, being 1.0m3/s in each of the following: Jaguari‐Jacareí, Cachoeira and Atibainha.
The portion of the outflow to the PCJ basins, corresponding to the release of a monthly average flow higher than the upper limit of 3.0 m3/s, should be added to the upper limit of the effective removal of volumes from the Equivalent System.
The available volume target, to be preserved in the Equivalent System at the end of December 2014, is 53.3 million m3, including both gravity and pumping volumes – Technical Reserves I and II.
ANA/DAEE JOINT NOTICE – CANTAREIRA SYSTEM no.240, of December 2, 2014