Ofwat launches investigation into supply interruptions

Ofwat has launched an investigation to get to “the bottom” of recent water supply interruptions experienced by customers following the freeze and thaw.

The regulator said it will evaluate water companies’ “preparedness” in the run up to the severe weather conditions to determine if they “planned ahead sufficiently”.

Rachel Fletcher, chief executive of Ofwat, said: “To be left without a vital public service like water – in some cases for several days – is deeply distressing, particularly for those in vulnerable circumstances. Through this review, we are aiming to get to the bottom of why this happened and to identify what lessons can be learned so customers experience minimum disruption in these kinds of circumstances in future.

“We’ll find out where companies did well by their customers and where they’ve fallen short, including the compensation being offered to those who were directly affected. Water companies should ensure that compensation adequately reflects the scale of inconvenience and distress caused to their customers. Compensation should be fair, fast and free from hassle for customers.”

As part of the review, Ofwat said it will be seeking input from a wide range of groups including: household and business customers who were directly affected by supply issues, public representatives, community organisations and local authorities.

It will work with the Consumer Council for Water and will liaise with the Department for Environment, Food and Rural Affairs (Defra) and the Welsh government.

The regulator said it will consider whether any further regulatory action is needed when it has completed the review.

Last week, Fletcher said several water companies had “fallen well short” on their forward planning to cope with the pressures caused by the adverse weather.

Meanwhile the government has asked Ofwat to report back with “initial lessons” about the water supply disruptions seen throughout the country.

Ofwat will publish its review conclusions by 15 June 2018.

Compensation levels

Under the Guaranteed Standards Scheme customers are entitled to £20 for the first 48 hours of supply interruption and then £10 for each 24-hour period thereafter.

While there are exemptions for extreme weather events, Ofwat has outlined it would “nevertheless expect companies to pay this compensation to customers”.

A spokesperson told Utility Week: “There’s nothing stopping companies from going further and providing additional compensation or support to their affected customers.”

Several water companies have already said how much compensation they will pay to affected customers. 

• Thames Water

Thames Water came under pressure from the mayor of London, Sadiq Khan, who described the water shortages in the capital as “unacceptable”. He told the company’s chief executive Steve Robertson he expects “generous compensation” to be issued to those affected.

Thames has since agreed to compensate customers “over and above the statutory minimum”. The amount the company will compensate will depend on how long customers were affected. Those who experienced supply interruptions for four to 12 hours will receive £30, for 12-24 hours it will be £50, followed by £100 for 24-48 hours and finally £150 for anything more than 48 hours.

The company will also make “discretionary payments” of £2,500 to each affected school and offer an education package of visits to Thames Water sites and talks by staff on science, technology, engineering, and mathematics (STEM) subjects.

Robertson said: “We’re really sorry for the disruption to water supplies. We completely understand the distress and inconvenience it caused and it is right that customers and schools affected are properly compensated. This was a highly complex situation and we worked round the clock to get everything back to normal as quickly as possible.”

• Southern Water

Southern Water said customers who were without water for less than 12 hours will receive £25, those without water for more than 12 hours will receive £50 and those without water for more than 24 hours will receive £75.

It will also donate a £2,000 STEM-focused community grant to each school affected by the interruption and will offer the schools a class with the company’s engineers and scientists.

• Severn Trent

Severn Trent said it will pay compensation of £30 to any customers who were without water for more than 12 continuous hours, or for more than 15 hours of intermittent supply.

The company will also be working with business customers and their retailers who were also affected.