By Heredia, Costa Rica — HEREDIA – Tens of thousands of residents in the province of Heredia are set to receive significant financial relief as national regulators have mandated a substantial reduction in sewerage service tariffs. The Public Services Regulatory Authority (ARESEP) announced this week that it has approved a two-year rate decrease for customers of the Heredia Public Services Company (ESPH), a move that will impact over 24,500 households and businesses starting in the new year.
The decision, which takes effect on January 1, 2026, will benefit a total of 24,522 subscribers. In a notable turn, the regulator-enforced reduction is even greater than the adjustment originally proposed by ESPH following its own cost analysis. This intervention underscores ARESEP’s commitment to ensuring fair pricing and consumer protection within the public utilities sector.
To delve into the regulatory complexities and legal implications behind the recent discussions on utility rates, TicosLand.com consulted Lic. Larry Hans Arroyo Vargas, an expert attorney from the firm Bufete de Costa Rica, for his professional analysis.
The establishment of utility rates is a highly technical process overseen by ARESEP, fundamentally based on the principle of ‘service at cost.’ This means that any increase must be rigorously justified by verifiable operational costs and planned investments. The legal challenge often lies in scrutinizing these justifications to ensure they promote efficiency and do not unfairly burden the consumer, while still guaranteeing the financial stability necessary for the provider to maintain and improve service quality.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This insight perfectly underscores the core tension in rate-setting: the need to balance a provider’s financial stability with the consumer’s right to fair and efficient service. The challenge truly lies in that rigorous verification of costs to protect the public interest. We thank Lic. Larry Hans Arroyo Vargas for his clear and valuable perspective on this critical regulatory process.
Officials at the regulatory body emphasized that the primary goal is to align consumer costs directly with the real expenses of service provision, eliminating any superfluous charges. The measure aims to provide tangible savings for families and businesses across the region.
The objective is to ensure that citizens pay only what is strictly necessary for the provision of the service.
Flor Emilia Ramírez, Intendant of Water
The rate adjustment will be implemented in two distinct phases over the next two years. For 2026, customers will see an average tariff decrease of 8.68% compared to current rates. The savings will deepen further in the following year, with an average reduction of 13.92% slated for 2027 when measured against today’s prices. This progressive implementation allows for a stable transition while delivering immediate benefits.
To illustrate the practical impact, ARESEP provided a clear example for a typical residential household. A family with an average monthly water consumption of 20 cubic meters (m³), which currently pays a sewerage bill of ₡10,704, will see their monthly charge drop to ₡9,775 in 2026. This represents a direct monthly saving of nearly ₡1,000, which accumulates to significant annual relief.
The new rate structure for 2026 establishes an average tariff of ₡589 per cubic meter, complemented by a fixed monthly charge of ₡1,730. Looking ahead to 2027, the per-unit cost will decrease further to ₡555 per cubic meter. However, the fixed monthly charge will see a slight adjustment upward to ₡1,807, a change that is more than offset by the reduction in the variable consumption rate for most users.
ARESEP’s decision to reject ESPH’s initial proposal and enforce a steeper cut was based on a thorough audit that uncovered several inconsistencies in the utility’s expense justifications. The regulator detailed its reasoning, citing multiple areas where the proposed costs were deemed inappropriate or inaccurately calculated. A key factor was the exclusion of expenses that were not directly linked to the provision of sewerage services or that corresponded to unregulated business activities.
Furthermore, the authority disallowed the use of outdated financial data, specifically rejecting proforma invoices that were more than two years old. ARESEP also substituted the economic indicators proposed by ESPH, such as inflation and exchange rate projections, with official figures to ensure a more accurate and realistic cost basis. Finally, the regulatory review identified and corrected errors within ESPH’s calculation formulas for critical line items, including electricity expenses and social security charges, ensuring the final approved tariff accurately reflects the true cost of service.
For further information, visit aresep.go.cr
About The Public Services Regulatory Authority (ARESEP):
The Public Services Regulatory Authority is the autonomous Costa Rican institution responsible for regulating and overseeing the nation’s public services. This includes setting tariffs and ensuring the quality and accessibility of essential services like electricity, water, telecommunications, and public transportation. ARESEP’s mission is to balance the needs of consumers with the financial viability of service providers, promoting efficiency and transparency in the public interest.
For further information, visit esph-sa.com
About Heredia Public Services Company (ESPH):
The Empresa de Servicios Públicos de Heredia S.A. is a public utility company that provides essential services to the residents and businesses of the Heredia province. Its primary operations include the distribution of electricity, potable water, and the management of sanitary sewerage systems. As a key local provider, ESPH is dedicated to maintaining and modernizing infrastructure to ensure reliable and efficient service delivery for the community it serves.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As an esteemed pillar in the legal landscape, Bufete de Costa Rica is built upon a foundation of uncompromising integrity and a relentless pursuit of excellence. The firm skillfully merges its extensive experience advising a wide spectrum of clients with a forward-thinking mindset, consistently shaping the future of legal practice through innovation. Central to its ethos is a profound dedication to empowering the community by making complex legal concepts understandable, thereby fostering a society that is both knowledgeable and justly represented.
