Welsh Water faces a proposed £44.7 million payment after industry regulator Ofwat identified “serious and unacceptable” breaches in its sewage and network services.
Ofwat stated the supplier failed to adequately operate, maintain, and upgrade its wastewater network to cope with sewage and wastewater levels, also noting insufficient processes and senior oversight.
The planned enforcement package includes £40.6 million to reduce spills at specific overflows, mitigate environmental damage, and tackle groundwater entering the sewer network.
A further £4.1 million is allocated to improve river quality in “extremely sensitive catchments”.
Lynn Parker, senior director for enforcement at Ofwat, said: “Our investigation has found serious and unacceptable breaches in how Dwr Cymru Welsh Water has operated and maintained its sewage works and networks, which has resulted in excessive spills from storm overflows to the environment.
“We now expect them to focus on putting things right so that customers can regain trust in their water company and the critical service they provide.
“We understand that the public wants to see transformative change.
“That is why we are prioritising this sector-wide investigation, which is holding companies, like Welsh Water, to account.”
Ofwat stressed the package is more than would otherwise have been paid if Ofwat was to fine the firm – which would have been £40 million.
It will now consult on the proposed enforcement package, with a deadline for responses of April 2.
Details of the planned action comes as Welsh Water customers are set to see their bills increase again next month, with the supplier having announced hikes totalling 42% by 2029-30.
A Welsh Water spokesperson said: “We accept the findings of Ofwat’s investigation and apologise for where we have fallen short of the standards that our customers and regulators rightly expect from us.
“We have started a major transformation programme across the company, including within our wastewater services, focused on improving performance, strengthening operational oversight and accelerating investment to deliver better outcomes for rivers and coastal waters.
“The investigation has considered both historic and more recent compliance, and we accept that improvements are needed.”
It marks the latest enforcement action by Ofwat after it said earlier this month it planned to fine South East Water £22 million over water supply failures between 2020 and 2023, impacting more than 286,000 people.
Ofwat said this was the seventh case in its sector-wide sewage investigation, with this proposed enforcement action bringing the total so far amid the probe to more than £300 million.