Southern Water has been hit with a record £126 million punishment for spills of wastewater into the environment from its sewage plants, and for deliberately misreporting its performance.
The penalty will see customers get a rebate of at least £61 each.
Southern's failings included not making the necessary investment, which led to equipment failures, and spills of wastewater. Water regulator Ofwat also found the Company manipulated its wastewater sampling process, which meant it misreported information about the performance of a number of sewage treatment sites.
As a result of the misreporting, it avoided penalties under Ofwat's incentive regime.
This is not the first time this has happened, in 2007, Ofwat fined the Company £20.3 million after its actions meant it could raise its prices by more than it should have done.
Rachel Fletcher, head of Ofwat commented "what we found in this case is shocking", while Southern Water offered its deepest apologies.
The Environment Agency has launched a criminal investigation into the case, and added "we are pursuing our own criminal investigation into Southern Water due to suspected permit breaches at a number of its sites".
They said that they expect to start court proceedings soon.
Under the agreement with Ofwat, each customer will receive at least £17 in 2021 and at least £11 per year for the following four years.
Southern will pay a total of £123 million to customers, as well as a fine of £3 million.
Fletcher said "the previous management failed to stamp out this behaviour and failed to manage its plants properly. In doing so, Southern Water let down its customers and operated in a way completely counter to the public service ethos we expect".
Southern Water's current chief executive, Ian McAulay, commented "we have clearly fallen far short of the expectations and trust placed in us by our wastewater customers and the wider communities we serve".
"We are fully committed to the fast pace of change delivered since 2017. There is a lot more work to do but we're pleased that this proposal agreed with Ofwat enables us to fully make amends to our customers and regain their trust as quickly as possible".
