UK Water Watchdog Now Probing All Utilities on Sewage Spills

(Bloomberg) -- All 11 UK water companies regulated by watchdog Ofwat are now under investigation over sewage spills, with fines for some potentially coming later this month.

The regulator will open enforcement cases against four companies, on top of the seven already under scrutiny, it said in a statement Tuesday. Widening the net shows Britain’s sewage crisis is still not under control, with Ofwat citing persistent concerns the utilities may not be meeting environmental obligations.

After months of delays, three of the cases — against Thames Water, Yorkshire Water and Northumbrian Water — are set to conclude at the end of July, a person familiar with the matter said. The regulator has the power to fine business units as much as 10% of their revenue if they’re found in breach of their license.

Sewage spills into rivers and the sea have caused widespread public outrage, with many bathing sites now being tested by citizen scientists who don’t trust the companies to keep them safe. The issue, which plagued the Conservative Party right up to the recent election, is now a problem Labour needs to solve.

Any penalty would be a blow to heavily indebted Thames Water, which only has enough cash to last until next May. The probe into the beleaguered company was pushed back by the election and by a failed attempt from the utility to block the process through a judicial review.

Ofwat will gather evidence from Dŵr Cymru Welsh Water, Hafren Dyfrdwy, Severn Trent Plc and United Utilities Group Plc for the expanded investigation, it said Tuesday.

United Utilities fell by as much as 2.8% in London trading, and Severn Trent dropped by the same amount.

“The fact that Ofwat now has enforcement cases with all 11 of the wastewater companies in England and Wales demonstrates how concerned we are about the sector’s environmental performance,” said the regulator’s chief executive officer, David Black.

Ofwat’s probe is running in parallel with a criminal investigation by the Environment Agency into the same issue. Earlier this month, the agency successfully prosecuted Anglian Water Services Ltd. for non-compliance at treatment works. The company was ordered to pay £50,000.

Storm overflows are designed to act as relief valves when the sewerage system is at risk of being overwhelmed, such as during heavy downpours. Companies are restricted in how often they’re allowed to use them.

(Updates with potential timing of fines starting in first paragraph.)

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