Ofwat has launched an enforcement investigation into Welsh Water over concerns regarding the accuracy of the company’s reported performance data on leakage and per capita consumption (PCC).

The investigation comes after Welsh Water itself notified Ofwat of possible inaccuracies in the information it had provided.

Companies in the water sector are assigned performance targets by Ofwat and their performance is assessed against these targets on an annual basis.

Depending on their performance, companies may face penalties or receive rewards.

In the case of Welsh Water, Ofwat had previously deferred a decision on the company’s progress towards its leakage performance commitment in November 2022, as it sought to understand how the reported figures were calculated.

Ofwat has refrained from providing additional details on the investigation until a conclusion is reached.

The regulator’s Chief Executive Officer, David Black, expressed a commitment to holding companies accountable for their performance and ensuring the timely, accurate and complete sharing of data with both Ofwat and customers.

In an announcement, Welsh Water said: “Every Welsh Water customer will receive £10 rebate after an internal review of its leakage and per capita consumption (i.e. the amount of water used per customer) reporting concluded that elements of its calculations for these key measures for the years 2020-2022 did not comply with regulatory requirements.”

Pete Perry, Chief Executive Officer of Welsh Water, said: “We are very sorry and disappointed that this has happened. We’re investing an additional £54 million over the next two years to identify and reduce leakage as quickly as possible and we have shared the findings of our investigations with our regulator.

“Whilst our robust assurance process ultimately identified the issue, there were failures in our governance and management oversight processes that allowed this in the first place. We have made the necessary changes to how we manage leakage reporting and closed the gaps in our reporting and governance processes.”