Water and Waste Services Regulation Authority - ERSARA (Portugal/Azores Islands)


Regulatory Model

ERSARA was established in 2010, It’s an independent and regulatory authority, with financial and administrative independence.
It’s not only the Regulation authority for the drinking water supply services, urban wastewater management services and municipal waste management services, but also the Azores authority for drinking water quality
This regulatory model focuses on the structural regulation of the sector, on the regulation of the operators’ behavior and in additional regulatory activities.

Regulated sectors

This regulation applies to the following water and wastewater services:

Main responsibilities

The regulatory model developed by ERSARA focuses on the structural regulation of the sector, on the regulation of the operators’ behaviour and in additional regulatory activities.


  1. Structural regulation of the sector:
    • ​​Monitors regional strategies for the sector, following their execution and periodically reporting their advancement and shortcomings;
    • Prepares proposals of new legislation;
    • Sets tariffs for protected markets and for the use of monopoly infrastructures (define cost components, set/update tariff methodology for tariff determination, approve tariffs).
  2. Operators’ behavior regulation:
    • ​​Ensures economic regulation of the operators, by promoting price regulation to secure efficient and socially acceptable prices without harming the financial and economic sustainability of the operators;
    • Ensures the regulation of the quality of service, by assessing the service provided to end users and comparing operators to each other through the application of an indicators system, in order to promote efficiency;
    • Ensures the regulation of drinking water quality, evaluating the quality of the water supplied to end-users, comparing operators to each other and following up on non-compliances in real time.
    • Analyses consumers’ complaints and promotes conflict resolution between consumers and operators.
  3. Other functions:
    • Answers to different questions from all players in the sector.

Tariff Setting

The tariff system usually adopted by operators consists of a fixed part and a variable part (blocks) based on the volume of water consumed.
The tariffs set should ensure an adequate return of investment and services operational costs, as well as of environment and scarcity costs. Tariffs should also ensure an acceptable contribution by users from different sectors in cost coverage.
Tariffs are approved by municipalities except in the cases where municipalities join in Grouping of municipalities, in which tariffs also need their approval.

Quality of Service

ERSARA has the aim to protect user’s interests, mainly the degree of access and the quality of the service provided; operator's and mostly environmental sustainability.
Environmental quality (i.e. quality of water, aquatic ecosystems, degradation of productive land, etc.) is monitored by the Service of Regional Secretariat for Agriculture and the Environment.
Before 2010, quality of service was defined in specific agreements between the Autonomous Region and the Operator, based on the model provided by the Government.

The Regulator

This authority regulator was established by the following law:  Regional Legislative Decree number 8/2010/A, of 5th March on 2010, It’s an independent and regulatory authority, with financial and administrative independence. Its with the purpose to protect the interests of users and consumers, promote competition and ensure efficient, cost-effective and profitable services with satisfactory quality levels.
The Board of Directors is presented with 3 chairs (including the president) and its members are nominated for four years renewable for equal amount of years. In 2014 there was a new renewal, remaining the president for another 4 years and the other two chairs with new member Directors.

Legal basis:

Regional Legislative Decree number 8/2010/A, of 5th March on 2010
Azorean Environmental Legislation.


Rua Filipe de Carvalho, n.º 6, Apartado 3 (Headquarters)
9900-052 HORTA

Email: ersara@azores.gov.pt

Website: www.azores.gov.pt

Other relevant entities


Sector Description

The Water and Waste Services Regulation Authority of Azores, also called ERSARA, is the public authority in charge of regulating public water supply services, urban wastewater management services and municipal waste management services.
Due to the fact that in these sectors there isn’t a competitive marketplace and the tariffs can be established in a higher level than the services itself, this authority has been carrying out its own regulation model through Azorean marketplace. Therefore, protecting the consumers is one of ERSAR’s main missions.
The water sector includes water supply to populations in both rural and urban areas as well as to economic activities. This sector also comprises urban wastewater drainage and treatment.
The waste sector comprises the collection, treatment and disposal of municipal waste.
Both are considered services of general interest, essential to the well-being of citizens, to public health, to economic activities and to environment protection.
The water and waste sector should obey a set of principles that comprehend universal access, a continuous and high standards of the quality of service and price efficiency and equity.
These services are provided by 19 operators, municipal owned.
Its financing comes from regulation fees and drinking water control fees collected from the operators.

Legal and institutional framework

Water services (abstraction, conveyance and distribution of water for civil usage, sewerage and wastewater treatment) can be provided in an integrated way (by the same operator) or separately (by different operators).
In Autonomous Region of Azores, there are several kinds of operators with only direct management: municipalities, municipalized services and associations of municipalities.

Market Structure

The water industry in Azores has 19 operators providing water and sewerage services to a total population of 245,746 inhabitants. Municipal utilities hold 100% of the market. Unitary price of water per m3 widely varies across the nine islands. Average consumption at the end of 2013 was 2522,63 per day in Azores.
Water and waste services are classified as bulk services or retail services according to the performed activities. Bulk service is related to the wholesale activity of public water supply and urban wastewater management, whereas the retail services focus only on the interaction with the end-user.

Ownership and management of services

Water services provided are the following 5 ones: collection, transportation and distribution of water for civil use and sewerage, wastewater treatment.

Country profile

Main indicators of the water sector

Volumes of water supplied (billed) (2014): 13 609 523
Number of operators: 19
Population supplied with abstraction, treatment, distribution services (2012): 324 634
Population supplied with sewerage services: 324 634
Population supplied with water treatment services: approximately 324 634
Abstracted water volume (million m3) (2014): 14 495 924;


In March, ERSARA was created, starting its activity in April of 2010. It’s a recent Authority, with only 5 years of existence.
Since ERSARA’s creating, water quality has increasingly improved, up to almost 100% (the main goal).
Thus, we can identify two relevant periods in the regulation of the water and waste sector:

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