Ofwat's final decision to impose a nominal penalty on Dŵr Cymru / Welsh Water (‘Welsh Water’)

Date28 May 2024
May 2024
Ofwat's final decision to impose a
financial penalty on Dŵr Cymru
Cyfyngedig
Ofwat's final decision to impose a financial penalty on Dŵr Cymru Cyfyngedig
1
Ofwat's final decision to impose a
financial penalty on Dŵr Cymru
Cyfyngedig ('Welsh Water')
28 May 2024
About this document
This document sets out Ofwat's final decision with respect to the imposition of a
financial penalty on Welsh Water and the acceptance of enforceable
undertakings proposed by Welsh Water. The decision follows the publication, on
14 March 2024, of a notice of Ofwat's proposal to impose a nominal penalty on
Welsh Water, in light of undertakings proposed by Welsh Water. The
fundamental findings set out in that notice are unchanged. Taking account of
the representations Ofwat has received to that notice, this document includes
updates to Section 1 (Introduction) and Section 5 (Imposition of a financial
penalty). In addition, Section 3 includes some minor amendments to the factual
background and evidence considered, to ensure technical accuracy, and
provide greater clarity for readers. Section 6 (Summary of representations or
objections) sets out the representations we received following our notice, and
Ofwat's response and final position on the issues raised.
1. Introduction 2
2. Background 3
3. Evidence 18
4. Findings 48
5. Decision to impose a financial penalty 56
6. Summary of representations or objections 72
Ofwat's final decision to impose a financial penalty on Dŵr Cymru Cyfyngedig
2
1. Introduction
1.1. On 14 March 2024, the Water Services Regulation Authority ('Ofwat' or 'we') gave
notice that, in light of undertakings that Dŵr Cymru Cyfyngedig ('Welsh Water'
or 'the Company') is prepared to provide under section 19(1)(b) of the Water
Industry Act 1991 ('WIA91'), Ofwat proposed to impose a nominal penalty upon 1
the Company under section 22A(1) and (2) of the WIA91 for breaching the
following provisions:
paragraph 9.2 of Condition B; paragraph 1 of Condition M; and paragraph 6
of Condition F of its Instrument of Appointment ('Licence')2 by misreporting
information in connection with its leakage and per capita consumption
('PCC') performance commitments in its 2020-21 and 2021-22 Annual
Performance Reports and its PR19 business plan, and information about its
leakage performance commitment in the last three years of the 2015-2020
price review period; and
paragraph P12 of Condition P of its Li cence in relation to the adequacy of
its management resources and systems of planning and internal control to
enable it to properly carry out its regulated activities, particularly in
relation to its regulatory reporting.
1.2. Ofwat consulted on its proposal between 14 March and 7 April 2024. We received
three responses to our published notice and have considered these in making
our final decision.
1.3. The Company has provided undertakings under section 19(1)(b) of the WIA91
(the 'Undertakings'). For the reasons provided in Sections 2 to 5 of this
document, Ofwat is satisfied that it would be appropriate to impose a nominal
penalty on Welsh Water of £1 in light of the contraventions described in this
document and the Undertakings. 3 By this document Ofwat gives notice of that
decision under section 22A(6) of the WIA91.
1 Dŵr Cymru Cyfyngedig (Company Number 02366777).
2 Instrument of Appointment by the Secretary of State for Wales of Dŵr Cymru Cyfyngedig as a
water and sewerage undertaker under the Water Act 1989.
3 Which we published on 28 May 2024.

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