Yorkshire Water will pay out £19.8m to bill-payers after failing to meet key performance targets, Ofwat has said.
The company was one of seven that fell into the regulator's lowest performance category of “lagging”.
Ofwat judges the performance of water companies in England and Wales each year against the “stretching” targets they set in 2019 for a five-year period until 2025.
If they fail to meet these, Ofwat restricts the amount of money they can take from customers.
Thames Water is the company which must return the most, more than £101m, followed by Southern Water which must pay out £43m.
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Yorkshire Water will repay its 5.7m customers £19.8m.
Ofwat said the company met its targets on pollution incidents, unplanned outages and leakages but failed on almost everything else, including customer satisfaction and mains repairs.
A Yorkshire Water spokesperson said: “Despite last year being a challenging one, we made some great improvements in reducing leakage and pollution incidents, which we know are key areas that our customers care about.
"Whilst overall improvements take time, we are committed to doing more of what our customers expect and will continue to work closely with Ofwat on our plans. As a result of not meeting some of our commitments, there will be an adjustment to bills from April next year.
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“We’ve always been clear that our plans for improving the health of Yorkshire’s rivers are on track and we’ve committed to delivering more improvements than we initially planned. Due to the significant amount of construction needed to improve over 765km’s of Yorkshire’s rivers, we’ve spent time designing, developing and securing planning permission for all the work that is needed, so we are confident that we are investing efficiently in the face of high inflation.
“As we said last year, in relation to the investments we are making for wastewater we have some major projects which will deliver just at the end of the five-year period.
"There is a wide range of investment taking place across our region, resulting in us investing £800 million this year in Yorkshire’s infrastructure. On top of all of this, alongside the work we originally committed to do, we’re investing an additional £180 million to reduce discharges from storm overflows, the majority of which is funded by shareholders, as well as bringing forward some investment we were planning beyond 2025.”
David Black, Ofwat CEO, said: “The targets we set for companies were designed to be stretching – to drive improvements for customers and the environment."
Yorkshire Water is owned by Kelda Group, which was established when the water industry was privatised in 1989 and is now owned by various investment funds from Europe, Australia, the US and Asia.
The company with the largest slice of shares – 33.56 per cent – belongs to the state of Singapore, while Yorkshire Water reported a profit this year of £544.2m.
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