Sept. 26 (UPI) — British regulators Tuesday ordered 11 water companies serving England and Wales to return $139 million to customers next year via lower bills as a penalty for “underperformance” on pollution, leaks and customer service.
The action against all but six of 17 companies came after their performance was assessed against annual targets for 2022 to 2023 and found seriously wanting, water industry watchdog Ofwat said in a news release.
Seven were judged as “lagging, with the remainder deemed only ‘average’ and none were categorized as ‘leading.'”
One company, the embattled Thames Water, will have to repay almost 90% — $122.7 million — of the total rebate with the remaining tab being picked up by Affinity Water, Anglian Water, Dwr Cymru, Hafren Dyfrdwy, Northumbrian Water, SES Water, South East Water, South West Water, Southern Water and Yorkshire Water.
Public dissatisfaction with Thames, which serves 15 million homes and businesses in London and the southeast, has been growing with leaks from its pipelines at a five-year high and multiple pollution prosecutions for sewer flooding and dumping untreated sewage into rivers.
Ofwat said progress had been too slow with fewer than half of companies achieving their performance target on reducing pollution incidents and fewer than half of the companies meeting their performance commitment on leakage. The lackluster performances were accompanied by an overall decline in customer satisfaction during the past year.
However, the industry did better when it came to unplanned water outages with all but one company achieving the required level of performance.
“The targets we set for companies were designed to be stretching — to drive improvements for customers and the environment. However, our latest report shows they are falling short, leading to $139 million being returned to customers through bill reductions,” said Ofwat CEO David Black.
“While that may be welcome to billpayers, it is very disappointing news for all who want to see the sector do better.”
“It is not going to be easy for companies to regain public trust, but they have to start with better service for customers and the environment. We will continue to use all our powers to ensure the sector delivers better value.”
Ofwat said it was currently investigating all 11 water and wastewater companies with live enforcement cases ongoing against six companies for potential failures on sewage discharges into the environment. There were also two live enforcement cases against Dŵr Cymru and South West Water in relation to the accuracy of their leakage and per capita consumption performance reporting.
The watchdog also rebuked most of the companies for failing to fully invest their permitted funding for delivering service enhancements in the 2020 to 2023 period.
The $122.7 million hit to the bills Thames Water — the country’s largest public water utility — will be able to levy next year will only add to its financial and reputational woes.
In June, the government briefly considered nationalizing Thames Water to ward off fears that an $18 billion debt mountain could cause it to go bust.
Talks to place the company into temporary public ownership between ministers, the Treasury and Ofwat were part of contingency plans if investors failed to come up with $1.3 billion in emergency funding and the company collapsed.
In the end, Thames managed to secure an extra $960 million of equity funding from investors in July for the current investment round ending 2025 to help stabilize the company.
