Southern Water, Thames Water, and other water services companies based in the UK will be reportedly required to reduce millions of pounds from consumer bills after the regulator stated that they have missed their respective pollution targets.
Ofwat, the water regulator in England and Wales stated on Monday that eleven water providers will be required to give customers a return of roughly £150 million ($170.7 million) in the form of lower rates in the fiscal year 2023–24.
In recent years, the government and water providers have come under blatant criticism for allowing the discharge of sewage water into rivers and the ocean. The approach is only intended to be used during times of heavy rain, but the Environment Agency is looking into several businesses for serious and widespread violations.
Since 1989, despite having a natural monopoly, water firms in Wales and England have been owned privately and have been able to pay out billions of pounds in dividends.
Since customers are unable to switch water companies, Ofwat employs an outcome delivery incentives framework that administers automated payments or penalties in accordance with pre-established targets.
According to reports, Southern and Thames will be required to refund £28 million ($31.8 million) and £51 million ($58.06 million) respectively, after failing to meet goals for 2021–22 regarding internal sewer flooding, pollution occurrences, and noncompliance with water treatment works. Northumbrian Water and Yorkshire Water are the other two recipients of sizable fines, and their respective bills will be reduced by £20 million ($22.7 million) and £15 million (17.07 million).
Meanwhile, some firms will be able to charge more though because they reached their targets. Severn Trent Water, which may recover an additional £63 million ($71.7 million) from customer bills, will stand to gain the most, while United Utilities will be able to impose an additional £24 million ($27.3 million).
As a result, water utility companies will have to overall reduce bills by approximately £53 million ($60.3 million) for failures during 2021-22.
Source credit: https://www.theguardian.com/business/2022/oct/03/water-companies-cut-bills-thames-southern-pollution
