South West Water under investigation over leaks and usage figures

theguardian.com:

The owner of South West Water is being investigated by the industry regulator over whether it accurately reported leaks and figures showing how much water is used by its customers.

Pennon Group, which owns South West Water and Bristol Water Group, told its shareholders that Ofwat has announced an investigation into the company’s operational performance during 2021 and 2022.

Ofwat sets performance targets for water companies in England and Wales on leakage and “per capita consumption”, or the amount of water used by each household. It assesses companies annually and can issue penalties or rewards, depending on how they perform.

The regulator said the penalty could be up to 10% of a company’s turnover. Last year, Pennon brought in revenues of £792m.

Last November, the regulator said it was delaying a decision on whether South West Water was moving towards meeting its own targets on reducing leaks, as it tried to understand how the firm had calculated its performance figures.

Ofwat said it would conduct a “thorough investigation” into South West Water, which supplies to customers in Cornwall and Devon, as well as parts of Dorset and Somerset.

David Black, the chief executive of Ofwat, said: “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.

“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.”

Shares in Pennon Group, which is listed on the FTSE 100, slid by about 3% on Tuesday on news of the investigation.

Pennon said its operational performance data is “subject to rigorous assurance