Regulator Ofwat said five water and wastewater companies – Northumbrian Water, Anglian Water, Thames Water, Wessex Water and Yorkshire Water – have been served formal notices to gather further information for enforcement purposes.
The watchdog said this follows analysis of the information water and wastewater companies were asked to submit in late December about how many of their sewage treatment works might not be meeting requirements in their environmental permits, and what companies are doing to resolve that.
David Black, Ofwat interim chief executive, said concern about aspects of these five companies' submissions has prompted Ofwat's current focus.
But he said all water and sewerage companies in England and Wales remain subject to the ongoing investigation as Ofwat continues its review
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Mr Black said Ofwat will keep the enforcement cases under review, and the companies in focus may change as new information comes to light.
The watchdog said the five companies are targeted because the information they provided in December raised one or more of the following concerns:
:: It reported a significant number of wastewater treatment works which the company considers might not be compliant with its environmental permits, and/or
:: It raised concerns about how overall the company manages its compliance with its environmental obligations, and/or
:: It didn't sufficiently show how the company have established whether its treatment works are meeting the requirements of its environmental permits, and so we need further information for our assessment.
In their December responses to Ofwat, all but one company (Hafren Dyfrdwy) reported having had some treatment works that were potentially non-compliant with the flow to full treatment (FFT) requirements of their environmental permits.
Ofwat said many companies set out the steps they have taken or are taking to bring those treatment works back into compliance. However, some companies did not offer sufficient assurances that they monitor and understand the compliance of their treatment works, or the root causes of any non-compliance.
Mr Black said: “The data that emerged at the end of last year suggested widespread shortcomings in how water companies were running sewage treatment works. The first phase of our investigation suggests those concerns are credible.
"We have identified shortcomings in most water and wastewater companies and are continuing to investigate. But we have already seen enough in five companies to cause serious concern and warrant us taking further action.
"We will now dig deeper into what these five companies have been doing, with the prospect of formal enforcement against them if we find they are failing on obligations Ofwat enforces.
"We will have further questions for all companies on this. In the meantime, we expect them to make quick progress in addressing any potential non-compliance they might have, whilst strengthening how they manage their environmental obligations as a whole."
Richard Warneford, wastewater director for Northumbrian Water, said: “The environment is at the heart of everything we do. In its latest assessment, the Environment Agency awarded our environmental performance Four Stars, the highest rating possible, and we are proud of this and our industry-leading performance on pollution.
“We recognise the gravity of the investigation, will fully comply with the requests made and take our responsibilities very seriously. We were already working closely with our regulators on how we monitor sewage treatment works and have active programmes of work that we are investing significantly in at present.
“We will continue to liaise closely on our environmental activity with the Environment Agency, Defra and Ofwat as this process continues.”