Sudden severe weather earlier this year, which caused water supply outages across the UK has prompted Ofwat to review the compensation provided to customers.
The regulator is also considering expanding compensation arrangements to cover supply restrictions such as hosepipe bans as well as supply interruptions.
It is asking for evidence to inform a review looking to “update and uplift” the compensation awarded to customers when they are left without access to water.
Residential customers are currently entitled to £20 if they are without water for a day and an extra £10 for each 24 hours on top of that.
Following its investigation into water companies’ performance during the “Beast from the East”, Ofwat concluded that the compensation arrangements in place “do not reflect” the impact on customers who are without access to water.
Rachel Fletcher, Ofwat’s chief executive, said: “We know that customers rely on water like no other service and customers have told us of the profound impact it has on them, their families and their work when they do not have access to water.
“The current compensation arrangements do not reflect the impact on customers of not having water and so we are seeking evidence to help find the right level of compensation. Equally important as setting the right level is making sure that when customers are due some compensation, access to it is fair, fast and free from hassle.”
Once Ofwat has reviewed the evidence, it will “develop plans and submit recommendations” to the UK and Welsh governments by the end of the year.
Ofwat’s Out in the Cold report, published on 19 June, showed more than 200,000 customers across the country did not have water supply for more than four hours and tens of thousands were left off supply for days.
At the time, the regulator said: “Severe weather events are likely to become more common as the impacts of climate change are felt. Companies must continue to go further to ensure that the networks, processes and capabilities that they have will meet this challenge and ensure that customers are truly put at the heart of their businesses.”
Water companies paid out £7 million to customers in compensation due to supply interruptions encountered during the freeze and subsequent thaw.
United Utilities called off its hosepipe ban that was due to come into effect on the weekend.