Certainly one of England’s giant water monopolies is to be investigated by the watchdog over the accuracy of data it supplies on leakage and water consumption.
Water regulator Ofwat mentioned on Tuesday it was searching for to know how South West Water, which is owned by FTSE 100 listed Pennon Group, calculated its efficiency on leakage and per capita consumption of water.
David Black, chief govt of Ofwat, mentioned: “We’re dedicated to holding firms to account for efficiency and for sharing well timed, correct, and full knowledge with us and their prospects. We wish to guarantee that’s the case right here.”
Pennon mentioned it will work “overtly and constructively” with Ofwat.
If Ofwat finds Pennon has misreported knowledge the firm may face a monetary penalty of as much as 10 per cent of the corporate’s turnover, which final 12 months stood at £792mn.
The investigation is the most recent in a collection of regulatory inquiries into water firms. Six firms together with South West Water are already being investigated over considerations that they might be breaching sewage laws, together with potential unlawful discharges at greater than 2,000 sewage works.
About one-fifth of handled water is misplaced in leakage and unknown portions of storm water and sewage are being tipped into rivers and coastal waters, threatening to shut some seashores this summer season.
Shares in Pennon had been down greater than 3 per cent in early buying and selling, whereas different London-listed water firms Severn Trent and United Utilities additionally fell.
Martin Younger, analyst at Investec, mentioned: “With scrutiny of water firm efficiency and behavior, the investigation is clearly unhelpful for SWW, which can be below an enforcement investigation for environmental efficiency.”
South West Water was fined £2.1mmn final month by the UK’s Setting Company for air pollution offences throughout Devon and Cornwall spanning 4 years.
Tuesday’s recent investigation comes as England and Wales’ water and sewage firms face the largest wave of protests since they had been privatised 34 years in the past, with campaigners demonstrating at seashores in Plymouth, Falmouth, Brighton and Hove final weekend.
The businesses are additionally below stress for paying out £1.4bn in dividends within the 12 months to March 2022, in keeping with analysis by the Monetary Instances, in addition to excessive govt pay packages. 5 chief executives, together with the boss of South West Water, have given up their bonuses this 12 months in recognition of public concern.
The investigation into the accuracy of information leakage will not be the primary time that water firms have been criticised for offering deceptive data.
Ofwat mentioned in 2017 that knowledge offered by a number of of the water firms was so dangerous that prospects shouldn’t take them at “face worth”. The regulator criticised 4 firms for “primary knowledge errors” in the whole lot from their buyer payments to the variety of leaks that they suffered.