South West Water faces ANOTHER Ofwat probe

Pennon Group’s South West Water faces one other probe from Ofwat, with the business regulator this time sharpening its give attention to the agency’s leakage efficiency.

South West Water, which providers Devon, Cornwall, and small elements of Dorset and Somerset, was the topic of an Ofwat investigation into sewage dumping final yr as regulators and policymakers confronted stress to carry corporations to account for rising water air pollution charges.

Ofwat stated it could now probe the agency’s leakage and per capita consumption (PCC) charges, with the watchdog eyeing whether or not South West Water has beforehand shared ‘well timed, correct and full knowledge’.

The regulator was wanting element in asserting the investigation, nevertheless it famous it had in November final yr deferred a choice on South West Water’s leakage efficiency ‘because it sought to grasp how the corporate calculated its reported’ knowledge.

Pennon individually confirmed the investigation pertains to South West Water’s operational efficiency knowledge for the 2021-2022 monetary yr, including that its disclosures had been topic to ‘rigorous assurance processes’ together with ‘unbiased checks and balances carried out by exterior technical auditor’.

It stated: ‘We are going to work brazenly and constructively with Ofwat to adjust to the formal discover issued to South West Water as a part of this investigation.’

South West Water providers Devon, Cornwall, and small elements of Dorset and Somerset

Round 20 per cent of water operating via pipes in England and Wales is at present being misplaced to leakage, based on the regulator, which has recognized this a difficulty of rising significance amid inhabitants progress and local weather change. 

Ofwat investigates water corporations when it believes there could also be a breach of requirements.

Enforcement motion for breaches of licence situations and necessities beneath the Water Business Act 1991 can embody issuing an enforcement order to deliver an organization again into line, and monetary penalties of as much as 10 per cent of an organization’s turnover.

Ofwat units efficiency targets for corporations on leakage and PCC, and firms are assessed yearly with the potential to be penalised or rewarded.

David Black, Ofwat chief government, stated: ‘We’re dedicated to holding corporations to account for efficiency and for sharing well timed, correct, and full knowledge with us and their prospects. We need to guarantee that’s the case right here. 

‘An intensive investigation will now be carried out and we’ll present updates in the end on our findings and whether or not there may be any additional motion Ofwat must take.’

Pennon shares slipped 3.1 per cent in early buying and selling to 796.5p, brining 2023 losses to round 12 per cent.  

It comes at a time of fierce criticism of the British water industry, with corporations beneath fireplace for sewage dumping, leakage and their dealing with of regional droughts.

It has led to family water payments going up this yr to pay for water firms’ £10billion investment in cutting sewage pollution. 

Pennon traders have been centered on the group’s dealing with of drought within the south west particularly, as regulatory scrutiny among the many points driving a surge in short-selling interest late last year.

One other urgent concern is public and regulatory scrutiny of the group’s environmental credentials, significantly with regard to sewage dumping.

Untreated sewage dumping occurs at instances of heavy rainfall, when capability is breached and firms are compelled to launch stress on remedy amenities to cease overflow. Water corporations are licenced to dump sewage beneath sure situations, however there are rising issues limits could also be being illegally breached.