UK regulator investigates Pennon's South West Water over leakages
By Yadarisa Shabong
(Reuters) - Water industry regulator Ofwat said on Tuesday it has started an enforcement investigation into British water firm Pennon's South West Water, relating to its leakage performance.
Political and regulatory focus on British water companies has intensified over the last year along with public anger over the condition of infrastructure and the dumping of raw sewage.
South West Water was fined 2.1 million pounds ($2.65 million) by the UK's Environment Agency last month for pollution offences across Devon and Cornwall spanning a period of four years.
The investigation announced on Tuesday related to the accuracy of information reported by South West Water for its performance on leakage and per capita consumption, Ofwat said.
"We are committed to holding companies to account for performance and for sharing timely, accurate, and complete data with us and their customers," Ofwat CEO David Black said in a statement.
Parent company Pennon said it would work "openly and constructively" with Ofwat to comply with the regulator's notice to South West Water as part of the investigation.
Ofwat, overseeing the privatised water and sewerage industry in England and Wales, sets performance targets on leakage and per capita consumption for companies, which are assessed annually and rewarded or penalised depending on their performance.
Shares in Pennon Group were down more than 3% in early trade. Other London-listed water firms Severn Trent and United Utilities also fell.
Pennon is scheduled to report results on June 1 and analysts at Credit Suisse said in a note that the company's investor presentation next week would be the "most critical that the current management team has undertaken yet".
South West Water provides water and wastewater services for a population of about 1.7 million in Cornwall, Devon, and parts of Somerset and Dorset.
It also provides services in the Bournemouth Water and Bristol Water regions, according to its website.
($1 = 0.7923 pounds)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Shailesh Kuber, Kirsten Donovan)
