Southern Water has agreed to pay £126m to its customers and in fines, after failures in the operation of its sewage treatment sites and for deliberately misreporting its performance.
Water industry regulator Ofwat found the company had not operated several wastewater treatments works properly.
This included not making the necessary investment, which led to equipment failures and spills of wastewater.
It will pay £123m to customers through their bills, as well as a fine of £3m.
Ofwat also found that Southern Water manipulated its wastewater sampling process, which meant that it misreported information about the performance of a number of sewage treatment sites.
As a result, it avoided penalties under Ofwat’s incentive regime.