South West Water has agreed to pay £24 million after the water regulator found it spilled wastewater in the environment when it should not have done.
Ofwat said its investigation found a “range of failures” in how the water company managed its wastewater treatment works and sewer network.
A lack of adequate management systems, including oversight from its senior leaders and board, meant it did not meet its legal obligations.
South West Water proposed the £24 million enforcement package, to be paid by the company and its shareholders, to invest in its systems and address the failures.
It means the company avoided being fined by Ofwat – which the watchdog said would have amounted to £19 million.
South West Water serves some 1.7 million people in households across Devon, Cornwall, the Isles of Scilly, and some parts of Dorset and Somerset.
The proposed enforcement package incorporates £20 million worth of investment over the next five years to target specific storm overflows in environmentally-sensitive locations or particular communities.
A further £2 million will go towards establishing a local fund to tackle sewer misuse, and it plans to provide an additional £2 million of funding for environmental groups.
Lynn Parker, Ofwat’s senior director for enforcement, said: “Water companies should be in no doubt that they will be held to account if they fail to meet their legal obligations to customers and the environment.
“Our investigation found a range of failures in how South West Water has gone about managing its wastewater business.
“That is why we have secured the £24 million package and a commitment to put things right.”
Ms Parker added that the watchdog will continue to monitor the company’s efforts so that “customer confidence can begin to be restored”.
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