More than £120 million is set to be paid to existing and former waste water customers of Southern Water after an investigation into the company by the industry regulator.
The Consumer Council for Water has responded to Ofwat’s final decision on the action it will take after uncovering serious failures in the way Southern operated sewage treatment sites and deliberately misreported its performance information.
In a total package worth £126 million, the company will:
Return £123 million to former and existing customers. This is made up of:
£91.2 million for underperformance penalties – money it should have paid as part of Ofwat’s price review incentive regime, and;
£31.7 million (in lieu of a greater fine). This is additional compensation to customers for failing in its legal obligations.
Pay a fine of £3 million on top – in recognition of the serious and significant breaches of its licence conditions and statutory duties
Existing customers could receive an average of about £60 (depending on consumption), as a bill rebate over the next five years. Former wastewater customers will be able to apply directly to Southern Water for payment from April 2020.
Responding to the decision, Sir Tony Redmond, London and South East Chair for the Consumer Council for Water (CCWater), said: “Every household that was served by Southern Water during this period of appalling performance failure paid a price for the company’s misreporting, so we’re pleased Ofwat has supported our call for wastewater customers who have since left the region to be compensated too.”
“Financial penalties alone cannot repair the damage that has been done to customers’ trust in Southern, which is why the company needs to spell out exactly what action it is taking to restore confidence in it.”