Ofwat has launched an enforcement investigation into Welsh Water, relating to the accuracy of information reported by the company for its performance on leakage and per capita consumption (PCC), following a notification from the company relating to inaccuracies.
Welsh Water notified Ofwat that it had identified issues with its leakage and PCC performance calculations for the periods 2020-21 and 2021-22, as part of its 2021-22 Annual Performance Report assurance process.
Ofwat sets performance targets for companies on leakage and PCC. Companies are assessed against the targets annually and can be penalised or rewarded, depending on their performance.
In November 2022, Ofwat deferred a decision on the progress Welsh Water has made towards its leakage performance commitment, as it sought to understand how the company calculated its reported performance.
Enforcement action for breaches of licence conditions and relevant requirements under the Water Industry Act 1991 can include issuing an enforcement order to bring a company back into line with its obligation and/or imposition of a financial penalty of up to 10% of the company’s turnover.
The water sector regulator said it will not provide further information on the investigation until it reaches a conclusion.
David Black, Ofwat CEO, said:
"We are committed to holding companies to account for performance and for sharing timely, accurate, and complete data with us and their customers. We recognise that Welsh Water came to us when it became aware of the issue with the accuracy of its performance data.
“Ofwat's investigation will consider Welsh Water's restated performance figures, the circumstances that led to the company reporting inaccurate performance, and what steps it has taken or is taking to address these failings.”
It is understood that Welsh Water is considering how it might remedy the matter with its customers. Ofwat will consider any remedial plans as part of its investigation, and its decision on any further action.
Emma Clancy, Chief Executive of the Consumer Council for Water (CCW), commented:
“We recognise Welsh Water has moved swiftly to admit its mistake and the £10 rebate will go some way to reassuring its customers that it regrets the damage this will have caused to people’s trust in it. It is reassuring that the company identified the issue through its own assurance processes.
“Customers will want the company to take the right steps to ensure this doesn’t happen again. Our research shows leakage from water companies affects customers’ own motivation to save water so Welsh Water will need to build trust on this issue.”
On Tuesday this week Ofwat launched a separate enforcement investigation into South West Water’s leakage performance
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