Southern Water faces £176m penalty over poor sewage management

UK water utility Southern Water could face a £176m penalty from the country’s water regulator Ofwat for its failure to manage sewerage systems and meet customer service standards.

The water utility has been termed an "underperformer" in managing sewage systems after instances of sewerage flooding into properties.

Southern Water is said to be in discussion with the water regulator on the levy of penalties.

An Ofwat spokesperson told the BBC that the regulator could impose a £150m shortfall levy for "non-compliant" discharges from sewage systems and flooding to properties caused by blockages since 2010, with another £26m for poor customer service.

The Ofwat spokesperson said: "As part of that (price-setting) process, we need to look at whether the company has delivered what customers have paid for over the last five years.

"We have challenged Southern Water and in particular still have questions over how they have operated their sewerage network and treatment works."

The water regulator said that this is only the draft decision and is now awaiting a response from Southern Water.

The spokesperson added: "We will make a final decision in December."

The draft decision also indicates that the company’s bills will decrease by 8.5% in the next five years before inflation.

However, this is part of a five-year business planning and price review process, and a final decision is yet to be taken.

Southern Water is a private utility company serving customers from east Kent to Hampshire and has an annual turnover of £806m.