Welsh Water is to pay a proposed £44.7m after the industry regulator found “serious and unacceptable” breaches in the supplier’s sewage and network services.

The water authority for England and Wales, Ofwat, said the non-profit Dŵr Cymru, or Welsh Water, failed to properly operate, maintain and upgrade its wastewater network to ensure it could cope with levels of sewage.

Ofwat also found the company also did not have “adequate processes in place or oversight by senior bosses”.

The planned enforcement package will include £40.6m to reduce spills at specific overflows, reduce the environmental damage caused, and tackle groundwater entering the sewer network, as well as an extra £4.1m to improve river quality in “extremely sensitive catchments”. It is one of the largest water company fines issued in recent years.

Lynn Parker, Ofwat’s senior director for enforcement, said: “Our investigation has found serious and unacceptable breaches in how Dŵr Cymru Welsh Water has operated and maintained its sewage works and networks, which has resulted in excessive spills from storm overflows to the environment.

“We now expect them to focus on putting things right so that customers can regain trust in their water company and the critical service they provide. We understand that the public wants to see transformative change.”

Unlike water companies in England, Dŵr Cymru is a not-for-profit utility supplying 3 million people across most of Wales and parts of Herefordshire with drinking water and wastewater services.

In 2024, the Welsh government body Natural Resources Wales (NRW) found that Dŵr Cymru was responsible for the highest number of sewage pollution incidents in a decade – a 42% increase over 10 years. Six serious incidents were recorded, down from seven in 2023.

The company has faced a slew of legal and regulatory action in recent years. It was fined £40m by Ofwat in March 2024 after the water watchdog concluded that the company had “misled customers and regulators on its performance on leakage and per capita consumption”.

James Bevan, a former chief executive of England’s Environment Agency whom critics accuse of loosening river, coast and sea pollution rules, became a non-executive director on the board of Dŵr Cymru’s parent company last month.

Details of the planned action come as Dŵr Cymru bills are due to increase again next month, with the supplier having announced rises of 42% by 2029-30.

A spokesperson for the company said: “We accept the findings of Ofwat’s investigation and apologise for where we have fallen short of the standards that our customers and regulators rightly expect from us.

“We have started a major transformation programme across the company, including within our wastewater services, focused on improving performance, strengthening operational oversight and accelerating investment to deliver better outcomes for rivers and coastal waters.

“The investigation has considered both historic and more recent compliance, and we accept that improvements are needed.”

Ofwat said this month it also planned to fine South East Water £22m for ‘repeated supply failures’ between 2020 and 2023, affecting more than 286,000 people.

The Dŵr Cymru action is the seventh case in Ofwat’s sector-wide sewage investigation. The proposed enforcement action against the Welsh company brings the total so far to more than £300m.

Urgent changes to the water sector in Wales promised in 2025 by NRW include a new monitoring team, guidance on hitting improvement targets linked to new pollution reduction legislation and a tightened framework for annual performance assessments.

Wales is to get its own water watchdog under UK government plans to scrap Ofwat. It is not yet clear whether this will be a new organisation or whether NRW will take on an expanded role.

PA Media contributed to this report