WATER regulator Ofwat has ordered multiple water companies, including Thames Water, to reimburse customers for falling short on performance targets.
Firms have been ordered to pay more than £157 milion in total back to customers for missing key targets on customer satisfaction, pollution targets, leaks, and supply interruptions.
Thames Water was handed the largest fine, with its £56.8 million forming more than one third of the total fines handed out.
Regulators have ordered firms to remunerate customers for failing to meet targets set in 2019 which were supposed to have been met by next year.
Thames Water’s meeting of targets on leaks and supply issues saw it upgraded from “lagging” to “average” on the regulator’s performance review, but was still ordered to pay back costs to customers as it continues to be beset by financial difficulty.
The fines are separate from ongoing investigations into all 11 water firms across England and Wales.
Customers can now expect to see the remuneration reflected in bills, which will be updated to fall in line with the regulator’s order.
Thames Water is among 13 water firms handed fines, alongside Anglian Water, charged £38.1 million; Yorkshire Water, charged £36 million; Southern Water, charged £31.9 million; Welsh Water, charged £24.1 million; and South West Water, charged £17.4 million.
David Black, chief executive of Ofwat, said: “This year’s performance report is stark evidence that money alone will not bring the sustained improvements that customers rightly expect.
“It is clear that companies need to change and that has to start with addressing issues of culture and leadership. Too often we hear that weather, third parties or external factors are blamed for shortcomings.
“Companies must implement actions now to improve performance, be more dynamic, agile and on the front foot of issues. And not wait until the government or regulators tell them to act.
“As we look towards the next price control, the challenge for water companies is to match the investment with the changes in company culture and performance that are essential to deliver lasting change.”
A spokesperson for Thames Water said: “We are pleased that Ofwat has recognised the improvements we’ve made by upgrading our rating– this shows our turnaround plan is having a positive impact.
“We have achieved the largest reduction in financial penalties across the industry and are one of only three companies to improve their ODI performance over the year.
“While our performance penalty value is among the highest in the sector, this reflects that Thames Water has three to four times more customers than other water companies, so our penalty rates are set proportionally higher.
“The ODI penalty per household ranks Thames as an average performer in the industry.”
They continued: “Of note, we delivered our lowest ever annual leakage volume and recorded our best performance over the past five years for water quality (CRI), sewer flooding, and clearance of blockages.
“We recognise the work that remains to keep improving and get our performance where it needs to be.
“That’s why we have proposed an ambitious business plan for 2025-2030 to allow us to make the vital investment required in the next regulatory period. If Ofwat approves our plan, we will be able to keep our performance on its improved trajectory and deliver more for our customers and the environment.”
