Welsh Water is facing a £44.7 million enforcement package from Ofwat even as it commits £617 million to infrastructure spending in its first year of an ambitious transformation programme. The regulator formalised the package in June, following an investigation into wastewater asset failures, requiring the company to fund measures reducing storm overflow spills, tackling groundwater intrusion, and improving river water quality without passing costs to customers.
New CEO Roch Cheroux, who took over in January, has positioned the enforcement as part of a broader reckoning. He stated the company has “not delivered the level of service our customers and communities expect, particularly on environmental performance.” Investment during the year included £134 million on environmental improvements, £85 million on leakage reduction and £35 million to replace older pipes and improve drinking water quality.
Improvements have begun: Leakage fell during 2025-26 through targeted network repairs; customer complaints on water quality declined; and internal sewer flooding incidents dropped. Yet Welsh Water remains trapped at a two-star Environmental Performance Assessment rating and classified by Ofwat as lagging. Its path to three stars and exit from that designation will require sustained investment and regulatory compliance.
The company sits within a £4.2 billion capital programme through 2030, described by chair Jane Hanson as its most ambitious ever. Household bills rose 4.8% to £683 annually in 2026-27. Around 150,000 customers access social tariffs or assistance schemes.
Major projects underway include a £4 million underground tank in Ferndale to reduce storm overflow operations, a £5 million pipe replacement across 16km in Conwy Valley, and wastewater treatment works planned for the Afon Teifi. Welsh Water secured £450 million from investors in September 2025 to support delivery.