The company will pay US$52mn in fees for the area in Brazil and South America's busiest port.
The councilors want the utility in the Brazilian city to charge for the exact amount used.
Tesla is among those that will be invited to submit a proposal.
Rationing in the city began in 2015.
The concessionaire in charge of the Conexión Norte project, part of the 4G program, said that there have been four attacks so far this year that have resulted in mass staff resignations and loss of equipment.
The former head of São Paulo utility Sabesp decries the predicament of state-run water companies.