Welsh Water: Ofwat penalises company £24m for underperformance

Welsh Water has been ordered to pay a £24.1m underperformance penalty by industry regulator Ofwat.

It is one of only three water companies in Wales and England to be placed in the regulator’s lowest “lagging” category.

It comes as water firms across the two nations have been ordered to pay a total of £158m after missing key targets on pollution, leaks and supply interruptions.

A Welsh Water spokesperson said the company was “working hard” to implement improvements its customers expect.

Welsh Water’s penalty – up from £18.3m for the last financial year – is the fifth largest handed out by Ofwat this time around.

Another water company, Hafren Dyfrdwy, which covers parts of mid, north and south Wales, has been ordered to pay a penalty of £200,000.

Not a single provider across Wales and England has been placed in the regulator’s top “leading” category – with Welsh, Anglian and Southern Water “lagging” and the rest “average”.

Ofwat judges the performance of water companies in England and Wales each year and – if they fail to meet targets – it can restrict the amount of money they can take from customers.

In 2023, Welsh Water released sewage into rivers, lakes and the sea around Wales for more than 916,000 hours – about 20% of all hours of discharges across Wales and England.

Last month, the UK government announced legislation to tackle pollution that could see poorly performing water company bosses banned from receiving bonuses or even sent to prison.

David Black, the regulator’s boss, said this year’s performance is “stark evidence that money alone will not bring the sustained improvements”.

“It is clear that companies need to change and that has to start with addressing issues of culture and leadership,” he said.

“Too often we hear that weather, third parties or external factors are blamed for shortcomings.”

These penalties are separate to an ongoing Ofwat investigation into all 11 of England and Wales’s water firms, which has seen three companies ordered to pay £168 million in fines.

A Welsh Water spokesperson said: “We are working hard to deliver the improvements that we know we need to make, and our customers expect of us and have been outlined by Ofwat.

“Such improvements take time and are supported by detailed investment plans to ensure progress.

“Between 2025-2030 we’ve put forward a record investment package of £4bn.

“This investment will drive improvements for customers and ensure a high standard of performance across the company.”