Southern Water has been hit with a record £126 million fine after a “shocking” Ofwat investigation found failures in the company’s sewage treatment sites.
Ofwat found the company failed to operate a number of wastewater treatment works properly, leading to equipment failures and wastewater spills.
The watchdog said it had also manipulated its wastewater sampling process to avoid penalties in previous years.
Customers of Southern Water will receive rebates of at least £61 over the next five years.
Ofwat chief executive Rachel Fletcher said the discoveries were “shocking”.
“It shows the company was being run with scant regard for its responsibilities to society and the environment,” she said.
“It was not just the poor operational performance, but the co-ordinated efforts to hide and deceive customers of the fact that are so troubling.”
She said she hoped the company’s new leadership can show it has learnt from this “unacceptable behaviour” and can be trusted again.
Southern Water will refund £123 million to customers and pay a £3 million fine.
The punishment was reduced after the utility provider co-operated with investigators.
Southern Water head Ian McAuley said he is “deeply sorry” and there are “no excuses”.
“We have clearly fallen far short of the expectations and trust placed in us by our wastewater customers and the wider communities we serve,” he said.
“There is a lot more work to do but we're pleased that this proposal agreed with Ofwat enables us to fully make amends to our customers and regain their trust as quickly as possible.”
The Environment Agency is now investigating Southern Water over the environmental impact of its actions.