On 5 September 2016, Chile’s water and sanitation regulator, SISS, announced a five-year freeze on water tariffs for Aguas del Valle, ESSBÍO, ESSAL, and Aguas Nuevosur, which jointly serve 1.45 million customers. SISS cites falling electricity prices as the key factor enabling the new tariff freeze.
Following the February 2010 earthquake near central Chile that damaged water networks, tariffs increased a cumulative 24% between 2010 and 2015 to fund water infrastructure rehabilitation. At the same time, the regulator is seeking to improve investment levels based on utilities’ low network replacement rates.
In this Research Note, Bluefield water experts analyze the implications of this tariff freeze, evaluating the impact on water infrastructure investment and non-revenue water.
Bluefield Takeaways
- Power cost decline, lower CAPEX commitments spell relief for Chilean water utilities.
- Supply cuts, network replacement key concern for 2016-2020 investment.
- Bringing down non-revenue water remains a challenging task.
