In June, the regulator found that between 2005 and 2010 Thames Water reported more properties as being at a risk of sewer flooding than could be supported with evidence, resulting in an “inefficient spending of customers’ money”.
Thames stated it would accept reduction of £79 million from its regulated capital value, resulting in lower bills for its customers.
The water company said it would put an additional £2 million into the independently managed Thames Water Trust Fund to help customers who are having difficulty paying their bills, and invest £5million to support community projects.
Cathryn Ross, chief executive at Ofwat said: “We welcome Thames’s co-operative approach which means we have concluded our investigation more quickly and resulted in a better outcome for customers.
“We are satisfied that Thames has put right the problems that cause mis-reporting.
“It’s only fair that when companies make mistakes, they put it right and make sure customers are not out of pocket.”
Sir Tony Redmond, London and South East chair for the Consumer Council for Water, said: “Customers should never end up footing the bill for a water company’s mistake so we are pleased this investigation will result in additional benefits for Thames Water customers, including reduced sewerage bills and extra support for those struggling to pay.”
Thames Water admitted the “mistake” in its sewer flooding statistics in a statement in June, and added it was pleased that Ofwat has accepted its offer.