Ofwat has launched an investigation into South West Water’s reporting of leakage and per capita consumption (PCC).
The regulator raised questions around the accuracy of information reported by the company for annual performance targets. In November, after deferring a decision on progress made against targets, Ofwat queried how South West calculated its performance and has now formally launched the enforcement investigation.
The outcome of the enforcement action could lead Ofwat to take necessary steps to bring the company back in-line with its obligations relating to leakage and PCC. The regulator can impose financial penalties of up to 10% of the company’s turnover. For 2022, parent company Pennon’s full-year revenue was £792 million.
“We are committed to holding companies to account for performance and for sharing timely, accurate, and complete data with us and their customers. We want to ensure that is the case here,” David Black, chief executive of Ofwat said. “A thorough investigation will now be carried out and we will provide updates in due course on our findings and whether there is any further action Ofwat needs to take.”
The company has reported leakage below sector average – 6.3 cubic metres of water lost per day, per kilometre of pipe against the industry average of 8.7 cubic metres for 2021/22.
It met its most recent full-year target of -6% reduction to leaks for 2021/22.
South West and Bournemouth’s combined PCC (2021/22) is the highest in England and Wales for non-metered usage at 266 litres daily, compared to an average of 174. For metered properties, South West reported PCC of 118 litres daily, against a metered average of 134 PCC.
“It’s important our customers have confidence in our data. That’s why we rigorously check our data which is externally audited by an independent third party. We will of course provide any information the regulator requests and we will fully cooperate,” a spokesperson for South West Water said.
The company is due to report its full-year results next week on 1 June.
South West is one of six companies also under watch by Ofwat for reporting relating to wastewater treatment plants in the ongoing flow-to-full investigation.