Costa Rica’s Comptroller General has ordered the country’s national water utility and its public services regulator to identify customers who were billed more than they should have been for water, sewer and hydrant service, and to build a mechanism to pay them back. An audit released today put the improper charges at roughly ₡65.4 billion, about $144 million at the rate of ₡453.59 to the dollar.
The report concluded that our Instituto Costarricense de Acueductos y Alcantarillados (AyA) and the Autoridad Reguladora de los Servicios Públicos (Aresep) failed broadly to comply with the legal, technical and control framework that governs how rates are set. The findings reach into how tariffs are updated, how the money they raise is supervised, how the value of infrastructure is calculated, and whether the five services AyA bills for — drinking water, sewerage, hydrants, protection of water resources and related services — can be sustained. Aresep is the same regulator that sets fuel and electricity prices.
The largest single block of improper charges falls on sewer customers. The audit calculated that they paid ₡38.8 billion, about $86 million, for 5,909 assets that were already fully depreciated, meaning AyA had recovered its investment in them and kept billing for them anyway. Hydrant service accounted for ₡511 million, about $1.1 million, tied to 9,012 depreciated assets. In drinking water, auditors estimated improper charges of ₡26.1 billion, about $57 million, since 2023.
Auditors also questioned the values assigned to the infrastructure customers are charged for. A review of 3,761 assets revalued since 2019 found that 63.1 percent had risen in recorded value by more than 1,000 percent, and that some distribution networks were carried at up to 14,446 percent of their earlier value despite deteriorating in the ground.
The steepest increases involved infrastructure in the Huetar Caribe region, where AyA reports 70 percent unaccounted-for water, the share lost to leaks, metering errors and consumption that never produces revenue. The utility already loses more than half the water it produces in the Greater Metropolitan Area. Aresep declined in 2023 to recognize part of those revaluations in the rate base, on the grounds that they did not reflect the real condition of the pipes.
Along with overcharging, the Comptroller found rates that have gone years without formal review. AyA has not filed an ordinary tariff study for drinking water in eight years, for sewerage in nine, for hydrants in 11 and for related services in as long as 21, even though tariff income supplies roughly 70 percent of its budget.
Its own tariff unit prepared water and sewer studies that senior management saw in June 2025, but the institution neither sent them to Aresep nor documented a technical reason for holding them back. Aresep attempted several rate reviews on its own initiative and shelved them, saying AyA had not supplied reliable information. It never opened one for hydrants at all, and took 17 years to open one for related services.
The audit further found that AyA keeps the surpluses from its different services in a single common account without tracking where the money came from. In 2024, drinking water service lost ₡9.3 billion, about $20 million, while sewerage returned ₡3.7 billion and hydrants ₡243 million.
Because the funds are pooled, money paid by customers of one service covered losses in another. The Comptroller described this as unauthorized cross-subsidy that conflicts with the principle that each rate should finance only the service it belongs to, and noted that Aresep never carried out the financial reviews that would have caught it, despite receiving AyA’s regulatory accounting every quarter.
AyA’s own projections point to a shortfall of more than ₡34 billion, about $75 million, in drinking water service by 2027, driven largely by investment and debt payments. Even with a 15 percent rate increase, the institution calculated it would still lose more than ₡12 billion, about $26 million. The Comptroller warned that the financial position puts major works at risk, including the fifth stage of the Metropolitan Aqueduct and the sanitation program for urban areas.
Under the orders issued today, AyA and Aresep must identify the amounts collected in excess and define how customers will be compensated no later than June 30, 2027. New rate schedules must be published before December 31 of that year. AyA is required to put controls in place that keep each service’s revenue separate, and Aresep must establish procedures allowing it to act on its own when the operator fails to request a rate review.
What remains undefined is almost everything a customer would want to know. Neither institution has said whether repayment would arrive as a credit on future bills, a direct refund, or an adjustment folded into the next rate schedule, nor which billing periods would qualify, nor whether the account holder of record or the person who actually paid would receive it. The safest step for anyone who wants to be able to document what they paid is to keep their receipts.
AyA account numbers (NIS), appear on every bill, and billing history can be requested at agency offices. Landlords, condominium administrators and anyone who has moved between properties are the most likely to struggle to reconstruct a paper trail, particularly where several units share one meter, an arrangement that has generated separate billing complaints for more than a year.
Water is a small line item in most household budgets here compared with rent or transport, as our breakdown of what it costs to live in Costa Rica shows, but a refund calculated across several years would not be trivial. AyA said it is still analyzing the report and that it presented its position to the Comptroller last week, arguing that some findings were being interpreted differently from how the institution believes they should be read. Aresep said it is reviewing the scope and content of the orders.
The two halves of the audit sit awkwardly together. It says customers were charged for infrastructure they should not have been paying for, and in the same document says the rates they pay are too low to keep the system running and have been for the better part of a decade. Both things can be true at once, and the fix for one does not cancel the other. Whatever compensation is eventually defined is likely to come at the same period as higher bills.
